Shortly after, Fanhai received approval from all relevant regulatory bodies in both China and the UK and extended the offer period. At this point, the only remaining condition for the tender offer was “acquiring at least 50% + 1 share of the equity.”

Qinghui modified its tender offer, removing the discriminatory clauses directed against Fanhai.

Immediately after, just when major media outlets universally believed Qinghui would emerge victorious based on price alone, Fanhai Group suddenly launched an attack targeted directly at Qinghui.

Zhao Hanqing submitted a complaint to the FSA (UK Financial Services Authority), alleging that during the earlier scramble by major hedge funds to purchase Saint Games shares, an Australian hedge fund named Kings Asset Management had an affiliation with Qinghui. He claimed the two entities now jointly held over 15% of Saint Games shares without disclosing it as required, thereby violating regulations.

Fanhai pointed out that Qinghui’s non-compliance had placed it in an advantageous position in the battle for Saint Games—and that this “advantageous position” was unfair. At the same time, Kings Asset Management’s share purchases could easily be considered a contributing factor to the rise in Saint Games’ stock price; Qinghui and its affiliate were driving up the price in an attempt to force Fanhai to back down.

When the news broke, Saint Games’ stock price plunged in response.

The “affiliation” identified by Fanhai Group referred to the fact that the founder and owner of Kings Asset Management simultaneously owned another fund, which happened to be the pension fund for the employees of Qinghui Group’s Australian branch. That fund directly managed the retirement accounts of Qinghui’s Australian branch.

The UK’s definition of “affiliated parties” differed greatly from that of countries like the United States. In practical operation, a very peculiar aspect was that the FSA would count “a company and that company’s pension fund” as affiliates—a phenomenon that rarely occurred in acquisitions in other countries.

The FSA also stipulated that once a shareholder and their affiliates held over 3% of shares, every subsequent 1% increase required mandatory reporting and disclosure.

Just as in all countries, any “affiliation” between two or more parties among acquirers had to be publicly disclosed—it was unfair if two companies were clearly affiliated and jointly buying shares, yet the target company was unaware of their relationship. However, the legal definition of what constituted an “affiliation” varied from country to country.

In the United States, a jurisdiction with which Zhou Chang was far more familiar, there was no fixed criteria for determining a “beneficial owner.” Whether parties were affiliated mostly depended on agreements, chat logs, and the like between the two sides to judge if they had “reached an arrangement or understanding regarding the acquisition.”

Jing Hong had been supremely confident about the outcome of this complaint.

Sure enough, a few days later, the FSA issued its ruling. Due to the disclosure violation, the 7.5% stake held by Kings Asset Management was stripped of all voting rights. Furthermore, Kings Asset Management was required to sell off all the Saint Games shares it held within twenty trading days.

The moment this ruling came down, Qinghui Group immediately announced that it would no longer pursue the acquisition of Saint Games, withdrawing from the bidding once again.

The reason for the “withdrawal” was easy to understand. Kings Asset Management was now forced to sell that 7.5% stake. Given that Saint Games’ current secondary market stock price was significantly lower than Fanhai Group’s offer price, and because the “affiliation” prevented Kings Asset Management from selling those shares to Qinghui Group, Kings Asset Management’s only logical choice to maximize profits was not to dump those shares on the London Stock Exchange, but rather to accept Fanhai’s offer.

As a result, Fanhai Group’s shareholding would rise from its current 31% to 38.5%. With such a massive gap between the shareholdings of Fanhai and Qinghui, Qinghui could no longer secure stable control. It was only logical and reasonable for them to decide “no longer to pursue this acquisition.”

…

On the day Saint Games halted trading and Fanhai Group announced the outcome of the offer, the General Manager of Qinghui Group’s Strategic Investment Department reported to Zhou Chang: “Fanhai Group secured over 98% of Saint Games’ shares this time. They’ll definitely take it private, and Saint Games is going to delist. Even the CEO accepted Fanhai’s offer in the end and walked away with the money.”

Zhou Chang twirled a fountain pen in his hand. “Mm.”

Qinghui had just passed its lock-up period and also accepted Fanhai’s tender offer. At the time, the General Manager of Strategic Investment had asked Zhou Chang, “Do we still want to keep our 15%?” To which Zhou Chang replied, “Give it to Fanhai. 15% is useless. Consider it doing them a favor.”

Saint Games had essentially shot itself in the foot—deliberately underperforming on its financials to drive down its stock price. In the end, not only did the company fail to save itself, but it also failed to sell for a top price.

It could even be said that it was precisely because of the CEO’s—Mark Greenberg’s—petty trick of tanking the financials that Saint Games’ stock price cratered, falling far below Fanhai’s offer price. That was what drove holders of up to 98% of the shares to choose to “accept the offer” and “sell their shares.”

Of course, speaking strictly from a business perspective, Zhou Chang didn’t find the CEO’s actions incomprehensible. Facing a fierce and aggressive Qinghui at the time, he couldn’t find any “white knight” other than Fanhai. He had no choice but to accept Fanhai’s offer, handing over 31% of the shares to buy a three-month buffer period, intending to find a way to oust Fanhai later. And the “way out” he came up with was to sabotage the performance of Expedition, hoping Fanhai would lose interest and transfer the shares elsewhere.

Unluckily for him, Jing Hong saw right through it. And Jing Hong wasn’t someone he could afford to cross, causing the relationship between the two sides to collapse completely.

Across the desk, the General Manager of Strategic Investment self-critically added, “I was careless this time. I didn’t expect that the pension trust for Qinghui’s Australian employees shared the same founder and owner as Kings Asset Management. This ‘affiliation’ was extremely well-hidden.”

Zhou Chang remained nonchalant. “Mm.”

The reality was that Qinghui itself—including Zhou Chang, and naturally including Zhou Chang himself—had been completely unaware that Qinghui Group had any “affiliation” with Kings Asset Management. When Qinghui learned that Fanhai announced it would not raise its price and would hold to the original offer, they were deeply surprised; and when they learned that Fanhai had complained to the FSA claiming Qinghui “had an affiliation,” they were even more shocked.

This detail had actually been uncovered by Jing Hong.

As the CEO of Qinghui, Zhou Chang obviously couldn’t know everything. In fact, he had no idea which pension funds were used by subsidiaries in various countries and had never paid attention to them; such granular details were naturally not something a president needed to keep track of.

Qinghui was simply too vast.

It was even more impossible for him to know every law and legal precedent in every single country inside out.

Zhou Chang hadn’t looked into it, but Jing Hong actually had. And then he seized upon this single point of affiliation to sink his teeth ruthlessly into Qinghui’s fatal weakness.

Zhou Chang knew that regarding this bit of “affiliation,” Jing Hong must have investigated it to the very bottom and was absolute in his certainty that the FSA would rule the two companies as “affiliated.” Otherwise, Jing Hong wouldn’t have announced the price freeze last week, nor would he have rushed to throw a bucket of cold water over the feverish secondary market. Jing Hong wanted to keep Saint Games’ stock price as low as possible to widen the gap between the market price and Fanhai Group’s offer price, forcing the managers at Kings Asset Management with no other choice but to accept Fanhai’s offer and sell the 7.5% stake to Fanhai.

“Kings Asset Management really is something,” the General Manager of Qinghui’s Strategic Investment cursed under his breath. “Aren’t they just ruinous? Good for nothing, bad for everything. We worked hard for nearly a year, only to be intercepted by Fanhai in the end.”

“Forget it,” Zhou Chang set down his fountain pen. “We just weren’t meant to be with Saint Games. No need to force it.”

Seeing that Zhou Chang didn’t particularly blame him, the General Manager of Strategic Investment finally felt a bit relieved. In truth, Zhou Chang almost never blew his top, yet the formidable aura he radiated always left people trembling with anxiety. The manager added, “Still, when we cross swords with Fanhai in the future, we really need to be careful, careful, and extra careful. No amount of caution will be too much. To beat Qinghui, they really won’t let go of even the smallest detail—they’ll dig up every last thing until it’s squeaky clean.”

His tone was anxious and exasperated.

He never expected that across from him, Zhou Chang would open a competitor report on a certain product, glance at it, and—as if discovering something—trace his index finger right across the name “Fanhai,” rubbing over it.

“Mm,” Zhou Chang said. “Spicy.”

“…………?” The General Manager of Strategic Investment was visibly bewildered, asking timidly, “Mr. Zhou?”

“I heard you.” Zhou Chang raised a pair of seductive peach-blossom eyes to look at him. With a half-smile and without the slightest concealment, he repeated himself: “I said, ‘Spicy.'”!