Wilson stopped talking.
“Questions?” said Leary. “Dave? Mal?”
There was silence for a moment.
“I guess we have to take the valuation at face value,” said Dave Ablett.
“I’d say it’s a fair price,” said Wilson. “I’m not saying it’s a steal, Dave. I’m not trying to kid you. I could’ve gone in at twelve-point-two-five, say, or even twelve, but we’d be in a bidding war and who knows where the price would go. Probably way higher. This way, we get an agreed bid and a one percent break fee.”
“One percent of twelve-point-five billion? We should hope it fails,” quipped Mal.
“No, Mal,” said Wilson seriously. “This is a good deal. At twelve-point-five, it still leaves a lot of upside.”
Imogen shook her head. “Ed? I’m still uncomfortable with the length this has got to without the board knowing.”
“Well…” Leary frowned. “What would you like to do about that, Imogen?”
“Well, I mean … should we get an independent opinion on the quality of this acquisition?”
“Imogen,” said Mike Wilson, “we really are under extreme pressure of time here.”
“Why is that, exactly?”
“Because BritEnergy is extremely anxious about being put in play. If we can do the deal in the kind of timeline I’ve outlined, they’ll go for it. It it’s going to drag on, they’ll walk.”
“That doesn’t make sense,” said Imogen.
“It makes sense,” said Dave Ablett impatiently. “That’s business. Take my word.”
Wilson glanced pointedly at Ed Leary.
“Imogen,” said Ed, “I don’t believe we have the luxury of getting an independent opinion at this stage, desirable as that might be. I think Mike has put a very professional assessment to us and I think we’re going to have to go with that. Does anyone else disagree?” Ed looked around. No one spoke up.
“Well, I’d like to register it,” said Imogen. “I’m sorry, Mike. I think this went just a little too far without the board being informed.”
“You want to register that in the minutes?” said Ed Leary.
“Yes, I do.”
“Doug,” said Ed. “You want to register that?”
Doug Earl made a note. Wilson had to stop himself from rolling his eyes. If that made Imogen DuPoint happy, fine. Lawyer stuff. Like registering something in the minutes was going to make a difference.
“Well, I guess there’s only one question then,” said Dave Ablett.
“What’s the name of the new company?” suggested Wilson.
Dave laughed. “No, that’s another one. Where the hell are we getting this money from, Mike?”
“Not a problem,” replied Wilson. “As I said, the combined balance sheet will comfortably carry it. Turn back to that page.” Wilson waited for everyone to leaf back to the balance sheet. “Lyall, does that balance sheet include the extra four-point-two billion of debt?”
“Yes, it does.”
“See, Dave? That’s with the extra debt included.”
Dave studied the proforma balance sheet again. He nodded.
“Kind of preempts the agenda point on the issues with our debt covenants, doesn’t it?” said Wilson.
“Sure does,” said Mal Berkowitz.
“Dyson Whitney is confident on the loan. You can always get credit for a good deal. Hell, if you remember, at the height of the credit crunch, Pfizer managed to borrow twenty billion-plus to buy Wyeth and the banks were fighting each other to give them the cash. And that was when half of them were on life support from the government. Dyson Whitney is looking for a bridge from Citibank. With this balance sheet, I’m assured it won’t be an issue.” Wilson paused. “If the banks like this deal enough to underwrite four-point-two billion for it, I think we ought to just stop for a second and think about what that says. You ask me, it says a whole lot about the quality of the opportunity we’re looking at.”
Gordon Anderton nodded loyally.
“So effectively it’s down to the stock price?” said Dave Ablett.
Mike Wilson nodded. “The swap ratio we agreed is five-point-one of theirs to two of ours. I think we can be pretty pleased with that. Five-point-one to two, provided there are no major movements. Now, talking of the stock price, here’s the good news. The results for the quarterly filing tomorrow are strong, even by our high standards. I think you’ll be very satisfied when we move on to look at them. In fact, I think you’re going to be quite pleased. Right, Lyall?”
Gelb nodded.
Wilson laughed. “Come on, Lyall. Crack a smile! We have a great quarter and already he’s worried about how we’re going to beat it next time. Lighten up, Lyall. Let’s smell the roses occasionally.”
There was laughter. Lyall Gelb forced a smile.
“Obviously, given what we’ve just been talking about, this is an important filing,” continued Wilson. “I’ve got Hill Bellinger lined up to do the PR. We need to make sure these results get noticed and have the right effect on the stock price. Hill Bellinger always does a great job. Lyall and I will be on a conference call tomorrow with the analysts as soon as the results go out, and I’ll be doing a bunch of interviews. We’re going out strong with these results. They’re really something to be proud of. Anyway, we’re jumping ahead. Ed, is there anything else we need to cover here?”
Ed Leary looked around. “Are we done on this?”
Wilson waited.
“Actually, I have a question,” said Leary.
“Shoot.”
“What is the name?”
Mike Wilson laughed. “Always leave the big issue for last, huh, Ed? Look, I think we will need to think about the name, and I know the BritEnergy guys would like us to make some kind of a change so it doesn’t look like they’re just being swallowed. Personally, I like something simple, like LLB Energy, from Louisiana Light and Brit. What do you think?”
There were a couple of grimaces around the table.
“Yeah, right,” said Wilson, smiling. “Everyone’s a critic. Okay, right now, we’re not doing anything. First, I’d like to get the deal done. We don’t overlap in any significant markets, which is part of the beauty of the deal, so it’s not an urgent question. At the start we’ll stay separately branded in our own markets. A little later, we will need to think about rebranding.” Wilson looked at Gordon Anderton. “Gordon, you guys do branding work, don’t you?”
“Sure, Mike.”
“Good, then there’ll be a little work there coming your way.”
Anderton smiled.
“And Imogen, we’ll be using Grayson Arpel in New York on the deal—I think we need a major Wall Street firm for this one. But anything else, you know, the local stuff, you know you’ve got that, right?”
Imogen nodded. Slightly. Wilson wondered whether he’d gone a little too far with that. He made a mental note to be more subtle with Imogen in the future. It was impossible to embarrass a guy like Gordon Anderton, but Imogen obviously had some self-respect.
Leary nodded. “Well, okay. I think we need to vote. Do we approve this bid?” He looked around the table.
Dave Ablett nodded.
“I do,” said Mal Berkowitz.
“Wait, wait, wait,” said Imogen. “What exactly are we voting on?”
“Jesus Christ!” muttered Dave Ablett. Mal Berkowitz rolled his eyes.
Ed Leary stared at her in confusion. “We’re voting on whether we approve this bid. You know, do we want to buy this … BritEnergy.” He appealed to Wilson. “Is that right, Mike?”
“Pending due diligence,” said Wilson. “It’s all in the timetable on the last page. Today we need to approve it in principle. Obviously, the next step is to do the due diligence to check it out.”
“Well, I just don’t know if we can do this,” said Imogen. She glanced at Wilson for a second, then looked around at the others on the board. “Even in principle. I mean, do we have enough information? One short document and this discussion? I m
ean … this is a pretty big question. We’re talking about the whole company!”
“What would you like to do, Imogen?” asked Leary.
“Well, I want to know if the rules allow us to do this with such … limited information?”
“Doug?”
“I believe so,” said Doug Earl. “Pending due diligence, like Mike said.”
“And do we agree with that?” Imogen asked the others. “Maybe we should vote on whether we think we can answer that today.”
“What the hell more are we gonna know tomorrow?” demanded Mal Berkowitz.
“I’m just saying … this is very limited. This is very rushed.”
“This is business, honey,” muttered Dave Ablett snidely.
“What did you say?”
“Now, now…” said Leary. “Let’s be civil. Ummm … Imogen, I don’t think we need to be too legalistic. Huh? That’s not how we do things around here. We’ll have a chance to revisit this when the due diligence is done. Is that right, Mike?”
“Sure,” said Wilson.
“All right,” said Ed. “Imogen, is that okay? It’s pending due diligence. Now let’s vote on the motion. Dave, Mal? You said yes?”
They nodded.
“Gordon?”
“Count me in.”
“Imogen?”
Imogen DuPont looked around at the others one last time. But there was no support for her. Everyone else wanted to get on with it.
“I approve it on condition that we do a thorough due diligence of BritEnergy to verify the offer price and likely benefits of the deal. And I want to see the report and have enough time to read it properly before anything else happens. Can we register that?”
“Doug,” said Ed, “can we register that?”
Doug nodded. Wilson smiled to himself.
“Mike, I take it you approve. Lyall, you, too?”
“Yes,” said Lyall.
“Stan?”
Stan Murdoch hadn’t said a single word during the discussion, just listened and watched. The boardroom of Louisiana Light, he knew, wasn’t the place to challenge Mike Wilson.
“Stan?”
Mike Wilson was watching him.
“Sure,” said Stan.
Ed Leary smiled. “Then I think it’s unanimous.”
“Conditionally,” interjected Imogen DuPont. “Doug, have we got that?”
“Conditionally,” said Ed Leary. He turned to Mike Wilson. “Congratulations, Mike. I think I speak for the entire board when I say we hope you get there.”
“Thank you, Ed.”
“What’s the next step?”
“Our quarterlies are out tomorrow, as we all know. That’s important because of the stock price. As far as the deal schedule goes, BritEnergy’s board meets tomorrow as well. If they approve like we’ve just done, we start due diligence.”
16
The television over the bar was tuned to some kind of news channel. Sandy Pereira gazed at it mechanically as she sipped her beer. She glanced at the guy behind the bar, who smiled at her. Sandy smiled back, but not so as to encourage him.
Sandy Pereira was twenty-six, good-looking, and unhappy. A journalism major out of NYU, she had been with the New York Herald for a little over three years. The Herald wasn’t exactly the kind of paper she had dreamed of joining when she was at school. Like just about every other journalism student—at least the ones who didn’t want to work for Vogue—she had dreamed of investigative reporting, Watergates waiting to be exposed, Pulitzer Prizes. A job at the Times, at least. Certainly not a yellow paper like the Herald. But the world wasn’t like the dreams you have in college, and it was only a lucky break through a friend of a friend that had even gotten her an interview with one of the Herald’s editors.
She worked the city beat, putting together human interest stories, ideally involving the little guy standing up against City Hall, the Transit Authority, the Parks Department, the NYPD, the Taxi Commission, or any other government agency. She also gathered snippets of smut for the “No, New York!” column. This was a kind of negative column that her boss, Rosie Mandelstam, had dreamed up about a year ago. When it came to gutter journalism, no one had her finger on the pulse like Rosie, a chain-smoking, hamburger-munching, gravel-voiced tabloid veteran who looked like Barbra Streisand carrying an extra forty pounds in weight. No one knew better how to tickle the masses’ G-spot. The Herald’s readers loved “No, New York!” Anything obscene, prurient, seamy, or plain stupid went in, excluding pedophilia and sex crimes. Rosie knew where to draw the line. Apart from that, the grosser the better. People burning their genitals with fungicide or getting their lips glued together. Old ladies dying in their apartments and not getting found for months. Bullying by condo boards. People being cruel to cats. Pet abuse was a big winner. So was pet pampering. The stupid things rich people did were always good, the more extravagant and sickeningly wasteful, the better. The story about the woman with the poodle that had a different cashmere coat for every day of the week won a Groan of the Month Award from the readers.
Groan of the Month. Not exactly the Pulitzers Sandy had dreamed of at school.
A lot of the stories came from calls to the Groanline, which was another stroke of popular genius from Rosie. Give the people a voice, she said, and they’ll speak. And how! The Groanline number was listed at the bottom of the “No, New York!” column. Half the calls were complete hoaxes, and part of Sandy’s job was to weed out the more unbelievable of them. But not to weed too hard. Rosie taught her the necessary skills of the gutter press, the kind of things they didn’t exactly teach at NYU. Like the timeless art of stealing stories out of other newspapers, especially the ethnic press, which was a rich fishing ground for tales of the bizarre and the unnatural. And the difference between a denial and a failure to confirm, which was the difference between having nothing and having a story. Never ask a question, Rosie taught her. Tell them you already know, then demand that they comment.
Fortunately, there weren’t any bylines in the “No, New York!” column. Sandy found it uncomfortable to tell people exactly what she did. She said she was a journalist and tried to leave it at that. But people always wanted to know more. If pushed, she’d say she worked for the Herald, which was bad enough. Her mother thought she still did entertainment listings, which was what she had started with. Sometimes she pestered her to know when they were going to let her do something new. Sandy let her keep pestering.
Rosie wanted six snippets a day. “This is New York,” she’d say. “There’s gotta be six disgusting things happening out there!” There must have been, but finding them was the tricky part.
There hadn’t been much today. Among the usual dross of unbelievable or unprintable garbage, the Groanline had thrown up some story about a kid who’d been tossed into a commercial refuse container by some other kids and had stayed there a whole night before someone pulled him out. People walked past but ignored his calls. When Sandy called back on the number they’d left, there was only some lady called Morgenstern who didn’t know a kid called Kevin, the one who was supposed to have spent the night in the bin. Hoax. Sandy might still use it. She hadn’t decided yet. Technically, she was supposed to verify the stories before she submitted them. Like a real journalist. But this wasn’t real journalism. And what was the nonexistent kid called Kevin and his nonexistent friends who had thrown him in the nonexistent bin and the nonexistent passersby who had ignored him going to do? Sue her? No one believed anything they read in the Herald, anyway.
On days like this, Sandy sometimes came down to Gaston’s, a bar on Baxter Street across from the DA’s office. If you waited around long enough, you’d always see a couple of the DAs. It wasn’t hard to strike up a conversation with them. Sandy had gotten to know a few of the DAs and occasionally they threw her something. A couple of the DA guys were cute. Sandy liked the idea of them fighting for justice. She liked to romanticize it. When she saw the cute ones, anyway. She knew one of them real well. In fact, she’d known him
a couple of times.
Sandy looked around the bar. The place was pretty empty. It was still early. She thought she recognized a guy at one of the tables. No one she’d ever talked to, but maybe she’d seen him with the other DA guys before. He was with someone else. The second guy was kind of cute. Nice smile. The table beside them was free. Sandy picked up her beer and went over to it. The two men were deep in conversation. They didn’t even notice her sit down.
* * *
“I don’t know what it is,” murmured Greg, staring into his drink. “She’s changed. It’s only … I look back, I remember what it was like, I see how different it is. But it’s only recently. I mean it isn’t, but it seems like that. When I look back, I realize it’s been going on for a long time. It’s only now I see it.”
“You’re the frog in boiling water,” said Rob.
Greg nodded, smiling sadly. “Yeah. The frog. The water’s been boiling and I haven’t known it. Now I’m cooked.”
The minute Rob saw him when he arrived at the bar, he thought how terrible Greg looked. Sleepless, miserable. Rob was glad he had made the time to have a beer with him. The work in the war room was grinding on, but there had been a lull that afternoon as they waited to update their work once Leopard released its latest quarterly results, and he had managed to get away. Leopard’s people must have been working the numbers up to the last minute in Baton Rouge because they still hadn’t sent the figures through and they were due to file that afternoon. Rob didn’t want to think about the amount of work he’d have to do once the numbers arrived.
“When did you realize it?” asked Rob.
“It just hit me. On Friday, while we were having Japanese … don’t laugh.”
“I wasn’t laughing. Having Japanese is as good a time as any.”
“Jesus, Rob. Having fucking Japanese!”
Rob did laugh. Greg shook his head helplessly.
“I’m sitting there, and I’m looking at her, and she’s got this vacant look in her eyes, like she just couldn’t care, and suddenly I think, who is she? I mean, who is she? And then you know what? I tried to remember the last time we laughed or kidded around. You know what I mean. Or had sex.”
Due Diligence: A Thriller Page 12