by Frank Perry
evidence.”
“What! Are you nuts, Jules? How am I supposed to do that? Do you expect me to hop on a plane and fly to Africa and ask them nicely to return the container? I wouldn’t go near the thing, even if I could get near to it. These guys are fanatics, and they don’t like me.”
Jules was enraged. “I don’t care how you do it, j-- just get it done … no excuse. Just get it done!”
Hanson needed someone to talk to, someone to console him and share his rage. He went to find Irina. She was usually in the office early, working with her boss, Charlie Ritter, but her lights were off, and there was no indication that she’d come in. He went to Lab 4 where Fred Cooper was speaking on the intercom to someone inside the chambers. Hanson asked, “Hey, Fred, have you seen Dr. Petronova?”
Fred was one of the least hospitable people at the Institute and seldom talked to anyone outside the confines of his lab. All he said was, “No.” Then he continued conversing though the microphone with someone unseen that sounded a lot like Ritter.
Later, at ten o’clock, Charlie had finished stacking all of the remaining vaccines and antidotes into the bio container for shipment. Jules could check it later, after their conference with the Saudis. He decontaminated and went to the executive offices just as the phone call with Osborne was beginning.
Jules was sitting quietly, waiting for the others to join in. The star phone was on mute as he waved Charlie to sit. The call back from Osborne was quick. The investment banker made the introductions. All three Saudis who had visited GHI were on the call, plus one they had not met. Osborne did the introductions then asked the senior Saudi official if there was anything particular they wished to discuss. Osborne and the GHI execs held their breaths, waiting for the call to begin.
The main Saudi negotiator, Mohammed bin Abdulaziz Al Saud, began. “Thank you all for being our gracious host at your Baltimore Institute. We were very pleased with your story of success. As you know, the Kingdom of Saudi Arabia, through the benevolence of the Royal Family, is investing heavily in bio-technology for the future. Many new hospitals and universities are being built. This will be the foundation of the necessary infrastructure to attract world-class scientists. With this background, we would welcome your technology to our country. You have proven the ability to model and predict changes in virus and develop medicines to stop pandemics before they can begin. We would like to have this capability and to expand on it through further development and investment.”
There was a pause, and Jules released the mute button. “My dear Mohammed, you humble us with praise. I only hope that our Institute can be a part of your future vision. Our achievements are known around the world and would be a great boost to your place in the world’s scientific communities.” He was smiling and winked at Charlie who was listening intently.
“You are exactly right, Dr. Redinger. Now, before we proceed, can you comment on the news of today, regarding a new outbreak in Africa, only days after realization of an Ebola outbreak in a neighboring country?”
Jules momentarily bit his upper lip, thinking. “Ah… we have heard of such an outbreak, but we do not have any direct knowledge yet. As far as I know, it is not confirmed yet as Ebola. In any event, we are sending a large shipment of our latest vaccine and antidotes to Sierra Leone under a very nice contract from the USA’s Centers for Disease Control.”
Mohammed answered. “So, you are also prepared to stop the second outbreak, in Guinea, I believe, when it is confirmed. We would assume it is the same virus because the conditions are similar. If your predictions in Sierra Leone are correct, then they should also apply to a region nearby. We are very anxious to make some announcement regarding this and conclusively show success in both outbreaks when it is confirmed.”
Jules looked at Charlie before speaking. “We can only be sure when it is confirmed, Mohammed. We have prepared enough medicines for a typical outbreak; it takes months, so this may be a bit different.”
Mohammed understood Jules’ hedging on this point. “Are you saying that you have no more medicines?”
Osborne tried to intervene. “Now, Mohammed. This is all premature, don’t you think? Is this the sole reason for your call?
“No, it most certainly is not the reason, but it is related because it speaks to planning and foresight. We must know all dimensions to the Institute’s ability to forecast the future and to prepare for it. You are suggesting a business based on intangibles, on intellectual property value. We want to know if that value extends to magnitude of outbreaks as well as identifying the morphology.”
Jules responded. “There have never been two outbreaks occurring at the same time. This is something we are looking into. It’s always a tradeoff regarding the amount of medicines to produce. Our modelling can usually predict the next form of the virus, but not the possibility of multiple outbreaks or the case when a single event grows excessively before world aid organizations call GHI into action.”
“Thank you, Dr. Redinger. Now let me begin with our analysis.” Mohammed had not mentioned an offer, which unnerved Jules and Charlie. Osborne had said they were experienced negotiators and were good at this. For the next few minutes, the Saudi financial manager provided numbers related back to the GHI financial statements. He spoke of: return on assets, cash flow, balance sheet, intangible assets, and more. Both GHI owners found it frustrating.
Charlie suggested privately to Jules that Matt Hanson should be involved, but Jules waived it off. The last thing he wanted was to get mired down in number crunching, unless the Saudis insisted. So far, they had not. In the final analysis, both sides were interested in only one number – how much the Saudis would pay for the technology. After finishing the financial review, Jules stated that they didn’t have much reason to respond, that they understood how pro-forma accounting worked, and nothing discussed by the buyer really required a response. The Saudis had simply recited their conclusions, without seeking clarifications.
Just as it seemed that the rituals surrounding the core negotiations were boring everyone, Mohammed was ready to extend an offer. Jules and Charlie were alert. “Drs. Redinger and Ritter, the Kingdom of Saudi Arabia would like to offer to purchase your Institute. Since it is based almost exclusively on intangibles requiring key personnel to retain its value, which nobody in a free society can assure will remain in the future, it will be incumbent on those of us wishing to purchase the Institute to reach agreement with the key employees or risk having nothing in the end. Therefore, we must view this as a very high-risk venture. Not so risky from a performance standpoint, that is proven. But we must account for the fact that most of the value may reside in the minds of some of your most brilliant people.
“Based on these factors, we are willing to make you an offer that will subsequently require confirmation negotiations and contracts with many people, yourselves included. Based on the salary information you kindly provided during our explorations, we are prepared to offer lucrative increases to such key personnel including yourselves. Our offer will be firm, once this is accomplished in say, thirty days. But, before beginning these extensive and rigorous negotiations with your people, we are making you, the owners, an offer for the assets of the Institute, including the use of its current name, and not including liabilities. You will keep all liabilities. We are prepared to set down a formal Purchase and Sale agreement, once we have your agreement in principle.”
There was a pause for Jules and Charlie to consider this. Charlie just shrugged, signaling to Jules to continue. Jules responded. “This all seems reasonable from our standpoint as long as the P&S agreement is valued properly.”
Osborne remained silent, fighting the impulse to pressure closure quickly. Mohammed continued. “Well, if we are agreeable in principle, we will make an offer to purchase all tangible and intangible assets of the Institute for a fixed price of twenty million US dollars.”
Before Jules could react, his cell phone rang.
It was Osborne. Jules excused themselves to discuss the offer, muting the phone. “What’s this, Jim! Are they crazy? There’s a couple of decimal points missing in this!”
“Calm down, Jules. I told you they were tough.”
Jules suddenly felt that they were back to square one after months of work to get to this point. He felt enormous pressure that Charlie didn’t share. Charlie wasn’t always in tune with the outside real world. He liked working in the labs, away from the outside factors. He’d be happy to keep on puttering. Jules, on the other hand, understood the problems they were facing when the stolen shipment was discovered. Charlie wasn’t even aware that live virus had been included. That fact alone could destroy the Institute, leave them broke, and probably in prison. Even thirty days for negotiations with their employees seemed like an eternity to Jules. Then there was the real problem that there wasn’t any “intellectual property.” It was a scam invented by two sub-par employees. The owners had bought it hook-line-and-sinker. Charlie still believed it.