SRK was one of five directorships that Ed Leary held. The others included Louisiana Light, where Ed was chairman. At sixty-nine, three years after retiring as CEO of Holt Engineering, Ed was content to play his part as one of the battalion of elder statesmen who criss-cross the country to sit on boards and run the governance of America’s corporations. Custodians of American capitalism. That’s how Ed thought of himself. He also had a three-hundred-thousand-dollar consultancy arrangement with Holt that took a day or two of his time each month. Ed had no desire to return to the trials and tribulations of day-to-day management. He marveled that John Sadower still had the stomach for it.
Sadower continued talking. Ed’s mind wandered. He was flying home that night to Boston, then the next night he had to fly down to Baton Rouge to be ready for a Louisiana Light board on Wednesday morning at which they were going to review the results for the quarterly filing. Maybe he should have stayed in Houston, he thought, and gone on to Baton Rouge the next day. As it was, he wouldn’t get home much before one in the morning, and he would be leaving at four the same afternoon. He grimaced. Maybe he ought to cut out these Houston meetings. He had been on the SRK board six years. Six years was enough. There was a fight coming with John Sadower. It wasn’t going to be much fun. Ed had a feeling that Sadower was going to have to be pried kicking and screaming from the chairmanship of the company he had founded.
Maybe he should change his flight, he mused. Maybe stay in Houston tonight. But he didn’t want to do that. His wife, Catherine, had breast cancer. The breast had been removed four years ago but the cancer had come back in all kinds of places. She was fighting it. Thin, weak. Ed didn’t like to be away. He knew, when he dared to think ahead, there’d be time for that later. Too much time.
A secretary slipped into the room. Everyone glanced at her, hoping she was looking for them. Anything to have a break from listening to Sadower. She caught Ed’s eye and moved quickly around the table. She slipped a note into his hand and waited as Ed read it.
“Tell him I’ll call when we break for lunch,” he whispered.
The secretary nodded. She slipped out of the room.
It sounded as if John Sadower was finally wrapping up his presentation. Ed glanced at the note again.
Mike Wilson needs to speak with you.
* * *
The secretary found Ed an office he could use. He called Mike Wilson’s number.
“Mike?”
“Hold on, Ed,” said Mike. “I don’t want to talk on the cell phone. I’ll call you back.”
“Can’t we—”
“What’s your number? You still at SRK? You got a land line?”
“Yeah, I’m in some office. Hold on…” He read the extension number off the phone.
“Got it,” said Wilson. “I’ll call.”
Ed put the phone down, wondering what this was all about. After about a minute the phone rang.
“Mike?”
“That’s better,” said Wilson. “Ed, guess where I am.”
Ed shrugged. How should he know?
“London!”
“London, England?”
“The same.” Wilson laughed.
“What are you doing there?”
“That’s what I’ve called about. Ed, get ready. Are you sitting down?”
“Yes.”
“Ed, I’ve done us a deal.”
Ed frowned.
“Ed?”
“Yeah, I’m here, Mike.”
“I’ve done a deal like you asked me to.”
“When did I ask—”
Wilson laughed. “Not you. The board, Ed. Hell, you guys already changed my contract so I’d do a deal.”
“Oh.” Finally Leary realized what Mike Wilson was talking about. “The new strategy.”
“That’s right, Ed. I’ve done it!”
“That’s fine, but…” Leary frowned. “We haven’t formally talked about what kind of deal we’re looking for, have we? What kind of target we want.”
“Ed, you don’t think I know what kind of target we want? Come on, who else is going to know?”
“How advanced is this thing?”
“I told you, Ed. It’s done.” Wilson laughed again. “Pending board approval, of course.”
“You mean you’ve already…” Ed stopped, trying to get it straight in his mind. “Hold on, you mean you’ve already done it?”
“I’ve been meeting with the target CEO here in London today.”
“You mean they’re British?”
“You bet they are, Ed.”
Leary shook his head in confusion. He didn’t know whether a CEO was meant to do that, go as far as talking to the CEO of a target company without talking to his own board first, or at least to the chairman. Mike Wilson ran things at Louisiana Light pretty much the way he liked, Ed knew, which was fine by him, because the stock price showed that Mike obviously knew what he was doing. Ed Leary didn’t understand too much about the electricity industry or the way Louisiana Light did business and he didn’t think it was his role to get in the way, as long as everything was going smoothly. But he didn’t want to be some kind of a lame duck, either. He didn’t want to be taken for granted.
“Ed, listen. I’ve had to do this in a hurry. Literally days. Out of my control. I’ll explain it all when I see you. The important thing is, they like the deal and you will, too. They’re happy. The price is right. It’s going to their board Thursday. And you know what? Get this! We get a break fee of a hundred and twenty-five million if they approve and then another bidder comes over the top.”
Ed almost dropped the phone. “A hundred and twenty-five million? That’s the break fee?”
“Yeah. Standard. One percent.”
“Jesus, Joseph, and Mary, Mike! How much are we offering?”
“Twelve-point-five billion.”
Ed did drop the phone. He scrambled to pick it up.
“Ed? You okay?”
“They’re bigger than us!”
Wilson laughed.
“No, wait.” Ed tried to get his thoughts together. “You’ve already met them? You’ve agreed?”
“It goes to their board Thursday. They’ll approve. It’s in the bag.”
“Who’s doing the work for us?”
“Dyson Whitney.”
“Who?”
“Dyson Whitney.”
“But we use Merrill Lynch.”
“Not for this.”
“Why?”
“Look, Ed. I’m moving fast. Their board’s going to approve Thursday. Our board’s meeting Wednesday, right? It’s on our agenda.”
“No, it’s not.”
“It is now.”
“How can it be?” demanded Ed. “We haven’t seen anything. We’ve got no papers. Something like this … we can’t just talk about it. We’ve gotta … we need—”
“Relax, Ed. You’ll get everything. Everyone will get a paper first thing when the meeting starts. You’ll have time to read it, then we’ll talk about it.”
“And you expect us to vote?”
“We have to. Time’s of the essence here. Listen, Ed, this is a fantastic deal. The strategic fit is perfect. Wait till you see it. You don’t get an opportunity like this every day of the week.”
“And you’re sure it’s okay to give us a paper and expect us to read it and then—”
“Ed, I’ve talked it through with Doug Earl. He says this is the way to do it. Give him a call to check it out. He’s on his way back from London now. Give him a few hours and give him a call. It’s all above board.”
Leary was silent.
“Now, Ed,” said Wilson. His tone turned admonitory. “You’re going to back me on this one, aren’t you?”
Ed knew that tone in Mike Wilson’s voice. There were times when there was no way to say no to Mike Wilson. At least he couldn’t do it.
“Ed?”
“Yeah, Mike. I guess. If this deal’s really as good as you say.”
“I’m going to b
e counting on your support, Ed.”
Leary nodded. “But…”
“What?”
“Twelve-point-five billion, Mike. Where are we going to get that?”
“It’s all taken care of. Don’t worry. You’ll see all the details on Wednesday. You know what, Ed?”
“What?”
“This’ll make you chairman of a twenty-three-billion-dollar company!”
Ed thought about that. Holt Engineering, at its height, had been worth maybe a tenth of that. No, less.
“Now, how does that make you feel?” said Wilson.
“That…” Ed shook his head. The truth was, it was absurd.
“Twenty-three billion, Ed. I like the look of your stock options now.”
Ed Leary felt like laughing, it was so ridiculous. He did laugh. “What about you, Mike? What did we agree in your new contract? What was the bonus for doing a deal?”
“Oh, I really couldn’t remember, Ed,” said Wilson, joining in the laughter.
Ed Leary laughed again. He didn’t know why. Something seemed tremendously funny. He just wasn’t sure what. “How much was it? Ten million in cash for you and another ten in options?”
“Something like that,” said Wilson. “Not that I want it. Twelve million, I think. Ed, I wouldn’t even know. Last thing on my mind.”
They were still laughing. Suddenly Ed stopped. “How are the results? For the quarterly?”
“The results are good, Ed. You’re gonna be very happy.”
“Mike, seriously. If I’m going to support you on this thing, you’ve got to be straight with me. Be honest. This is a good deal, right?”
14
Night had fallen in London when Mike Wilson got off the phone with Ed Leary. He looked out the window of the hotel room. There was no moon in the sky. Below him was Hyde Park, a vast, black emptiness, like a huge lake.
He turned around and sat down. The room was overdecorated, too many patterns on carpets, curtains, furnishings. The British idea of old-fashioned luxury. Made him feel claustrophobic.
Wilson thought with satisfaction about the meeting he’d had with Andrew Bassett that afternoon. Bassett wanted the deal almost as much as he did. Wilson sensed that he had gotten the other man absolutely right. He knew exactly which buttons to press. “Sir Andrew,” Bassett could already hear himself being called. He could see himself two years ahead, CEO of a big global company, and that was all he could see right now. Like anyone who wants something badly, thought Wilson, Bassett believed anything that made it seem as if he could get it. But an awful lot could happen in two years.
Doug Earl, the company’s general counsel, had been with him for the meeting. Lyall Gelb was meant to have come, but it turned out that one of his kids had to have an appendectomy and Lyall didn’t want to be away if he could avoid it. Besides, what with the disruption of the kid getting sick and going to the hospital and having the operation, Gelb had lost a lot of time. Normally, he would have worked the entire weekend before a quarterly filing. Wilson had managed at the meeting without him. Lyall had already met the British team anyway, and the offer was so generous that he wasn’t needed to help squabble on the terms. On the contrary, Andrew Bassett could hardly believe the numbers he was looking at.
Wilson smiled to himself. Everyone’s a winner, he thought, and the deal goes through. Wilson had learned that lesson from the master himself, Ken Lay. That was in the early years of Lay’s career, before he took his eye off his business and started thinking he was some kind of statesman, when he was still the smartest operator around. The smartest operator Wilson ever saw, that was for sure.
Mike Wilson had started his career at an Atlanta-based utility called Georgia Electric. After a couple of years he moved to InterNorth, a gas company based in Omaha, where he first met Stan Murdoch. In 1985, both he and Stan were executives at InterNorth. That was the year a certain Kenneth Lay, head of Houston Natural Gas, came knocking. Lay’s proposition resulted in an acquisition and merger of the companies. Within a year, the combined company that resulted would be renamed Enron.
Wilson wasn’t there to see that happen. After the deal, like most InterNorth executives, both he and Stan Murdoch found themselves surplus to requirements. They went their separate ways, Wilson as president of Carolinas Electric, a small Charleston-based operator, and Murdoch to the electricity generator Arrenco. But Mike Wilson was there to see the takeover, and the manner of it left an indelible impression on him. InterNorth was three times the size of Houston Natural Gas, and technically InterNorth, not Houston, was the acquirer. Yet it was Ken Lay and his boys who ended up in charge. Even though he was a victim of Ken Lay’s ruthlessness, Mike Wilson was awestruck by Lay’s efficiency and guile. There were all kinds of rumors about the secret promises he had made to get the InterNorth board to the table. Over and over, in the years since then, Wilson had analyzed the sequence of actions. He had come to two key conclusions. The first was that Lay pulled it off by making all the main players believe they were going to be winners from the deal. The second was that you could make people believe they were going to be winners even when everything else pointed to the opposite, as long as they wanted to believe it. The day he was kicked out of InterNorth, Mike Wilson vowed that if he ever did a deal himself, he would do it like Lay.
That was what he was doing now. Andrew Bassett wanted to believe he was going to be a winner. Everything Wilson had said to him at their meeting had been designed to make him believe that he was right.
Wilson got up and poured himself a scotch out of the minibar.
Doug Earl was already on a plane back to the States. Wilson had kept the company jet. He told Doug he had other business to attend to that night. He didn’t. Not Louisiana Light business, anyway.
He glanced at his watch. Almost nine. Three o’clock in Baton Rouge. He thought of ringing Dot. Dot Mendelsson was a society divorcée. As head of the biggest company in Baton Rouge, Mike Wilson was a pillar of local society. Member of the board of Louisiana State, patron of the Baton Rouge Arts and Sciences Museum, trustee of half a dozen charities. Dot and he moved in the same circles. It kind of made sense. The sex wasn’t frequent, and it wasn’t great, but that wasn’t too important. Mike Wilson had a different, more powerful compulsion. It was a relationship of convenience for both of them. Wilson had two ex-wives and five children. He wasn’t looking for any more of either.
Wilson didn’t call her. Maybe later.
He sat and sipped the scotch. A certain kind of pressure was building up inside him. For a while he just sat there, feeling it grow. He knew what it was. He sipped his scotch in minute portions, barely letting the fluid touch his lips. It was a kind of tantalizing, agonizing pleasure to resist the impulse, to tell himself that he might not give in. That this time, for once, he might just withstand the temptation. To let the pressure build and build, even, as he did, knowing he wouldn’t resist in the end. He knew it from the moment he had sent Doug Earl off in a cab to Heathrow. He knew he would succumb. That only intensified the pleasure of resisting.
But first, there was a phone call he had to make.
Wilson put down the scotch and dialed a number in New York. He waited as it rang.
“Yeah?” The voice was high-pitched, nasal.
Mike Wilson had never met Tony Prinzi and had no desire to. It was only through a voice on the phone that he knew him. He had been told that Prinzi was a short man, squat, almost a Danny DeVito lookalike.
“Tony?” he said. “It’s Mike. Mike Wilson.”
“Mike Wilson. This is a pleasure. How are you, Michael?”
“Not bad, Tony.”
“How did you make out the other night?”
“Not so great.”
“No luck?” There was a chuckle. “So I heard.”
“Tony,” said Wilson, “I just wanted to let you know, that deal we talked about, it’s on track. I don’t want you to have any doubts on that account.”
“I appreciate you telling me, Michael. Not th
at I was worrying, but … one does wonder from time to time. The clock ticks. You understand me?”
“I thought I ought to let you know. The cut I get will cover everything. It’s more than enough.”
“That’s very good, Michael. Thank you for calling. You’ve set my mind at rest. Not that I don’t trust you. If I didn’t trust you, both your legs already would be broken.”
There was silence.
“That’s just talk, Michael.” There was another chuckle. “Don’t worry about it. Is this why you’ve called, to tell me this?”
Wilson hesitated for a moment. “Actually, I was wondering, Tony … you might get a call.”
“Where from might I get this call?”
“London.”
Another chuckle. “Michael, always on the move. I never know where I’m going to hear of you next.”
“I wonder if you could oblige,” said Wilson.
“You tell me your deal’s on track?”
“Absolutely.”
“Then it would be a pleasure.”
“Thank you, Tony.”
“Michael, don’t thank me. Thanking is for friends.” There was a last chuckle, and the line went dead.
Wilson put down the phone. He tried to put the last remark out of his mind. And the one about his legs.
He refilled his glass, sat down again, sipped, tried to rediscover the mood. Soon it was back. Now that the call was out of the way, he could truly savor it. The futile resistance, the knowledge that he would succumb, the game that he played with himself in pretending that he mightn’t. There it was. His skin prickled with the exquisite agony of it.
He wanted to gulp down the drink, but he forced himself to sip. Slowly.
Due Diligence: A Thriller Page 10