The phone was on a small mahogany table under the window. Beyond it, through the glass, were the gold-tinted trees of the park. When he picked up that phone, he knew, he was going to have to go in hard. Not show the slightest doubt about what he’d done. Not concede for a second that he’d given away any more than was absolutely necessary.
One more piece of acting, he thought wearily. One last effort before he could get on the jet and forget about everything. For a night. He closed his eyes, imagining the casino in Budapest. Imagining how he’d feel when he took his seat and watched the first hand going down on the baize in front of him.
He opened his eyes, took a deep breath, and picked up the phone.
“Say that again, Mike,” said Pete Stanzy in New York when he had heard what Wilson had called to tell him.
“We’ve gone fifty-fifty cash and stock on the deal.”
“No, Mike.” The words came out of Pete’s mouth automatically. He was gazing at the bullpen, still trying to take in what he had just heard. What he still hoped he hadn’t heard.
“What’s wrong with you, Pete?” demanded Wilson. “Can’t you hear me?”
“Mike, Mike…” Stanzy shook his head in bewilderment. “You were going to tell Bassett he had to make up his mind, the offer wasn’t indefinite. Isn’t that what we agreed? He delays, you walk. That was the line, right?”
“Yeah,” said Wilson.
“Well?” said Stanzy, almost begging, almost pleading for Wilson to start over and say that was what he had done.
“Bassett was holding out on me, Pete. He was looking for a kick in the price. I had to make a decision. I’m not going to give him any more on the price, right? But—”
“How could he be seriously asking more on the price?” demanded Stanzy. “Twelve-point-five! Jesus Christ, Mike. How could you seriously believe that? What the fuck are you—”
“You gonna tell me how to negotiate?” yelled Wilson down the phone. “I was there, you understand me? You weren’t! I was the one in the room!”
Stanzy was silent, too angry to say anything. There was no need to have given Bassett anything, price or cash. Nothing. Under no circumstances.
“Now listen to me, Pete,” said Wilson. “He was holding out on the price. Believe me.”
“How do you know?”
“He said it! Right upfront. His chairman said the price wasn’t enough, what with their attractiveness in the market. Starts talking about their portfolio of assets and all this crap. So I said, that’s it, we can’t do anything on price, you’ve got the best deal you’re ever gonna get. Make your mind up, the offer closes today. And what does he do?”
“What?” inquired Stanzy mechanically. It was beyond belief.
“Bassett gets up. He physically gets up from the table. He’s walking. So I say, Listen, there’s no way I can budge on price. But it’s a strong deal, a good deal, and I want to do it. So let’s see whether we can’t put some more cash into it. And he sits down again.”
“Does he?” muttered Stanzy. “Isn’t that a surprise?”
“Sits down, and I say, Okay, let’s see what we can do. So he sits down and says he wants sixty-forty. I say there’s no way we can do that. So he’s about to get up again. So I say, Let’s do it fifty-fifty.”
“And he accepted that?”
“He did.”
Stanzy bet he did. He shook his head in disgust.
“So, that’s where we are,” said Wilson. “I had no choice. Fifty-fifty. We announce Friday week.”
“Fifty-fifty,” murmured Stanzy, thinking of what John Golansky was going to say when he told him. “Mike, that’s six-point-two-five billion. Do you realize that?”
Wilson laughed. “Hell, Pete. I negotiated it. Of course I realize it.”
Stanzy didn’t see what was so funny. “Don’t you think you should have spoken to me about this before you offered it?” He was no longer thinking about what John Golansky was going to say. He couldn’t even imagine how he was going to tell him.
“Come on, Pete,” said Wilson cajolingly. “You guys can cover it.”
“Mike, I don’t think you understand. That’s a full two billion more than we agreed.”
“I can do the math, Pete.”
“Then maybe you can tell me where it’s coming from?”
“Same place the rest is coming from,” replied Wilson amiably.
“No, it’s not!” Something in Pete Stanzy snapped. “We are struggling to get the four-point-two, Mike. Do you understand that? We are struggling. I’m gonna tell you something. For some reason, your name as a debtor isn’t exactly pure and virgin out there in the market. You understand what I mean?”
“I don’t need you to tell me—”
“Well, you fucking need someone! We are struggling to get you four-point-two! You are this far above junk! I want you to understand that. People are talking about you, Mike. Merrill is saying things.”
“Fuck Merrill!” Wilson yelled back. “You believe what they’re saying?”
“Doesn’t matter if I believe them! What matters is what other people believe!” Pete Stanzy was beside himself with anger. He could see the deal slipping away because of this ludicrous offer Wilson had just made, this offer that was utterly unnecessary. There were simply no circumstances he could imagine that could have required Wilson to do that. The deal was going to slip away because they weren’t going to get the cash to finance it. This big, beautiful deal with the big, fat forty bips waiting for him at the end of it. His deal. If Wilson had been standing in front of him, Stanzy probably would have tried to throttle him.
“Come on, Pete,” said Wilson again, jocular.
The lightheartedness in Wilson’s tone just aggravated Stanzy even more. “You don’t understand, do you?” he yelled. “We’re going to be getting you junk, Mike! Junk! If you’re lucky! If we can even find it. Is that what Buffalo wants? Is their board gonna go for that?”
“Pete, relax. Combine the balance sheets and it’s still strong. Even with the extra two billion.”
“It’s not the balance sheet people are worried about! It’s what’s not on the balance sheet!”
Wilson was silent.
“You hear me, Mike? You hear what I just said?”
“What’s not on the balance sheet?” said Wilson quietly. “What do you mean, Pete?”
“You tell me, Mike.”
“It’s all in the filings. Everything we’ve got that’s off the balance sheet. We’ve got three billion of debt in special-purpose entities. It’s there in black and white. Everyone knows it.”
“And that’s it?”
“That’s it.”
“Are you prepared to sign a document to that effect?”
“Jesus Christ, Pete! What are you accusing me of? Everything’s audited. Everything’s—”
“Are you prepared to sign a document to that effect?” demanded Pete Stanzy again.
“What is this?” retorted Wilson. “Is this a condition of you continuing as my banker?”
“Yes,” said Pete Stanzy. “It is.”
There was silence. In London, Mike Wilson stared at the autumn trees in the park. In New York, Pete Stanzy stared down at the traffic on Forty-fifth Street.
Stanzy didn’t quite know how he had reached this point. He desperately wanted this deal. It was the biggest deal he’d ever done or even come close to doing. Yet he had just demanded his client’s personal statement of honesty in the bluntest terms possible, and threatened to walk away if he didn’t get it. He had never done anything like that before, never even considered doing it. Or anything remotely approaching it. But he just couldn’t go back to John Golansky, not after their last conversation, and ask for another two billion. Not without something to back him up. Although what a piece of paper with Mike Wilson’s personal guarantee was worth wasn’t clear. Even as he stood there with the phone in his hand, waiting to hear what Wilson was going to say, Stanzy realized the absurdity of asking for it. He couldn’t believe th
e story Wilson had just told him about the meeting with Bassett. Why should he believe anything Wilson signed?
In London, Mike Wilson was still thinking about it. Swallowing his pride. “All right,” he said.
“I appreciate that, Mike.”
“I won’t be back in the States until tomorrow.”
Stanzy didn’t say anything to that. His silence was pointed.
“Jesus Christ!” said Wilson. “All right, I’ll speak to our counsel and get him to draw something up. He’ll fax it to me here and I’ll sign, then I’ll fax it to you.” Mike Wilson paused. “Will a fax do?” he asked, and Stanzy could hear the belligerency creeping back into his tone.
“That’ll be fine, Mike.”
“You’re screwing things up for me here, Stanzy. I’m meant to be flying out of here right now.”
“I’m sorry, Mike. If you just do it like you said, that’ll be great.”
“Yeah.” Wilson laughed sarcastically. But his mind was already moving on. Let Pete Stanzy humiliate him if he dared. It was a small price to pay, and once this deal was done, just let Dyson Whitney try to get any more business from him. Right now, he still needed them to raise the loan or the deal wouldn’t go through. Everything else was set. After this morning, he had Bassett in his pocket. Oliver Trewin had looked like he might make things difficult, but Wilson was confident he had disposed of that threat as well. He didn’t like the man, but he would happily give him a payoff if that would buy his cooperation. The boards of the two companies were lined up. Nothing else stood in his way. The loan was the last remaining obstacle, and if his signature on a piece of paper meant he was going to get over it, that was one signature he could certainly provide.
“Mike,” said Stanzy, “I really appreciate it.”
“Yeah,” replied Wilson, and he slammed the phone down.
* * *
Pete Stanzy took the fax up to John Golansky’s office.
“I’ve been speaking with Mike Wilson,” said Pete. He didn’t know any easy way to say it, so he just went ahead. “He wants another two billion.”
John Golanksy started laughing.
“He recut the deal, John. Fifty-fifty, stock and cash. They announce Friday week.”
Golansky stopped laughing. “You’re serious, aren’t you?”
Pete Stanzy nodded. He put Wilson’s fax on the desk.
“What’s this?” asked Golansky.
“It’s the best I could do, John.”
Golanksy read it. “What? I’m supposed to frame this?”
“Come on, John. We don’t get this loan arranged, we don’t get the deal. We don’t get the deal, we get nothing. And we both look like jerks.”
Golansky read over the fax again, a look of distaste on his face. “Anyone who signs something like this, it just makes me think he’s an even bigger crook than before. Bruce Rubinstein’s gonna love it. You want to go show him?”
Pete sat down across the desk from Golansky. “He’s not a crook, John. He’s just given away a little more cash than we agreed. We’ve got to help him raise it.”
“He’s not a five-year-old, Pete. He ought to have—” Golansky stopped. His eyes narrowed. “You didn’t tell him he could offer more cash, did you?”
“Are you out of your mind?”
Golanksy continued to watch him suspiciously for a moment. Then he sat back in his chair. “Bruce Rubinstein’s gonna love it,” he murmured to himself again. He shrugged. “What do you want me to do, Pete? Tell me. You want me to go to junk? You want me to raise this money whatever the cost? He’s gonna be paying fifteen percent on this debt.”
“Just get the money,” said Stanzy.
“Just get the money,” murmured John Golansky. “Even at fifteen percent, I don’t know if I could. We were hitting the wall at four-point-two, Pete. Now you’re looking for half as much again.”
“You can’t get it?”
“Their balance sheet stinks. Every day I look at it, it stinks more.”
“Yeah, but BritEnergy’s strong.”
“Brit Energy’s strong…” Golansky sat forward. “Let me tell you what I think. I think your boy and his whiz kid of a CFO have been up to a few tricks. I think the market’s starting to figure it out, and they don’t like it.” Golansky glanced at the fax from Wilson again. “You think that’s possible, Pete?”
Stanzy shrugged.
“Tell me,” said Golansky, “what do you really think about this deal?” He looked Stanzy straight in the eye. “Level with me, Pete.”
Pete Stanzy and John Golansky liked each other. They pretty much trusted each other—to the extent that any two people can trust each other in a world where a multimillion-dollar bonus may depend on one person not letting the other know all of what he knows, even if they’re supposedly batting for the same team. And from the very start, they had both wanted this deal. But they wanted different parts of it. Stanzy wanted the acquisition to be made, the money and stock to be handed over to BritEnergy’s shareholders. When that happened, the bank would earn its advisory fee and the bulk of his bonus was safe. Golanksy wanted the debt, not just the bridge loan that would finance the deal in the first instance, but the bonds he would then sell to investors over six months to pay back the bridge. When the bonds were sold, the bank would earn the other part of its fee, and his bonus was secure. Pete Stanzy needed the combined Louisiana Light and BritEnergy company to last all of three minutes. Golansky needed it to survive six months.
They both knew it. And they both knew that each one’s trust for the other had its limits.
“Huh, Pete?” said Golansky. “What do you say? Really?”
Stanzy thought about it carefully. “From my client’s perspective, I think this is one of those deals.… If it happens, everything’s great. And if it doesn’t, maybe everything isn’t.”
“Can you be more specific?”
“Honestly, John, I can’t. I don’t know anything. It’s just a feeling.”
“So it’s like a kind of Hail Mary deal?” said Golansky, who had been a football player.
Stanzy nodded. “Something like that.”
“Really?”
“Yeah. I think so.”
Golansky considered it.
“A Hail Mary deal with a fucking big fee for us on the end of it.”
“That’s a point,” murmured Golansky.
They looked at each other.
“Bruce Rubinstein’s gonna love this,” muttered Golanksy again.
“Fuck Rubinstein.”
“Yeah,” said Golanksy. “Fuck him.”
Stanzy got up to go.
“Pete,” said Golansky. “You know the stake the firm was going to raise on its own account?”
Stanzy nodded.
“We might not do that. Huh? Maybe it’s not such a great idea.”
29
A shutdown in a Lousiana Light plant in Argentina had hit at around eight A.M. local time. In London, Stan Murdoch spent the afternoon on the phone in his hotel room trying to help resolve it. He was given ten different reasons before he received what sounded like a sensible explanation, involving a faulty heat gauge that had tripped the system. But that might just be another false lead, or another lie someone was telling to shift the blame from themselves. By then, Ernesto Poblán, his deputy for South America, had arrived on location, and Stan left it to him.
Stan Murdoch wasn’t ready to retire. He loved what he did. But he was sixty-one. If Mike Wilson got rid of him after he did this deal, who was going to take him? Who’d hire an operations director at sixty-one?
It wasn’t a question of money. Money had never been a big factor for Stan. The older he got—and the more he had of it—the less important it was. By his own standards, he had plenty, anyway, more than he could ever have imagined when he enrolled for engineering at state college in Wyoming back in 1967. It had been a big subject of discussion in the family, whether he should go to college or stay on the ranch. Those were the days when you could still m
ake money running cattle on a family ranch. But he was the smart one. His two brothers, Max and Art, didn’t even finish high school. They needed the ranch more than he did. So Stan went to college, but the lean, Spartan ethos of the Wyoming rancher was in his blood.
How much money did he need, anyway? His wife, Greta, was happy. They had a nice big house in Baton Rouge and a cabin at Breaux Bridge where he went summers to fish. They had a good pension coming, when that day arrived. Maybe when Stan retired they’d sell the place in Baton Rouge and buy a farm somewhere and have a couple of horses. They’d talked about it, kind of go back to the way of life from which they’d both started. Their kids had gone through college and had their own families. Sometimes Stan helped them out, but they weren’t in need.
For Stan, that was probably the most insulting thing about this whole sorry tale. Not the way Mike Wilson had kept the deal secret from him for so long, or the way Lyall Gelb and even Doug Earl—Doug Earl, who wasn’t anything more than a jumped-up country lawyer sitting in a big fancy office down the hall from Mike—knew about it before him, but the way Wilson had offered him a fistful of cash to get out of the way. Like that was all he was, an obstacle that a couple of million bucks could remove. It was sad. Showed how much Mike Wilson had changed. Time was when he would have known better than to make an offer like that to Stan.
Nine years before, when Mike Wilson called up and asked Stan to come over and head up operations at Louisiana Light, he would have known. Stan agreed to come to Baton Rouge because he figured he’d be able to go out there and build a great operation and he figured that was Mike Wilson’s idea as well. At first it panned out like that. They bought a couple of good plants and added them to the portfolio. But things changed. Mike lost interest in the day-to-day operations. He got big ideas, he wanted to buy all kinds of things. Then Lyall Gelb appeared and suddenly they were buying god-awful plants in Colombia and Europe and God knows where, and they were creating all kinds of companies in all kinds of places and Stan didn’t know where the money was coming from or where it was going. Stan didn’t understand Lyall Gelb. He was sure he was a finance whiz, as Mike kept saying, but he just didn’t understand what made him tick. Lyall was a city boy; Stan came from a ranch in Wyoming. They could have been two different species. The installations Mike kept buying were dirty, almost derelict old plants that you couldn’t run properly no matter how much money you threw at them. But no matter how often Stan told him, Mike would laugh it off and go buy something else. “I’ll buy ’em, you run ’em,” Mike kept saying. Stan sweated blood to get those plants up. He was proud of what he achieved, but he had it in perspective. He knew just how bad these plants were even after he’d gotten all the improvements out of them that were humanly possible. But it was as if Mike didn’t care; all that mattered was the next purchase, and the next one, and the one after that. Stan just didn’t know how the company could go on. Mike laughed it off. “The stock price doesn’t lie, Stan,” he would say. “Just look at the stock price.”
Due Diligence: A Thriller Page 23