Due Diligence: A Thriller (24 page)

They heard a phone ring down the corridor. For an instant they looked at each other, then they both realized they were sitting in Wilson’s office. They bolted down the corridor to Lyall’s room.

“Lyall?” said Trewin.

“Yeah.” Lyall was panting.

“Sounds like you’ve been running, Lyall. You don’t have one of those awful treadmill things in your office, do you?”

“No.”

“Very good. Get out in the fresh air, that’s what I always say. Best thing for you.”

Wilson took a deep breath, just wanting Trewin to get on with it.

“By the way, Lyall, I might go on speakerphone as well, I think.”

“Sure,” said Lyall, glancing at Wilson. “So, what’s happening?”

“Well, this … can you hear? Is that all right?” Trewin’s voice now had a hollow quality.

“It’s fine, Oliver.”

“Good. Well, this data room thing, Lyall. Now, the thing is, I’m afraid there’s been a bit of a … how would you chaps put it? A bit of a glitch.”

Wilson’s eyes narrowed.

“What kind of a glitch?” asked Lyall.

“Well, I’m afraid Andrew’s asked them to hold off for a little while.”

“Andrew?” said Lyall. “You mean Andrew Bassett?”

“Yes.”

Lyall glanced at Wilson, who was shaking his head in disbelief.

“Asked who?” said Lyall.

“The lawyers,” replied Trewin. “He’s asked them not to let anyone in just yet.”

Lyall could see Wilson getting angrier by the second. Wilson motioned brusquely for Lyall to continue.

“Why is that, Oliver?” asked Lyall evenly.

Mike Wilson cocked his head, listening intently for the answer.

“Well, Lyall, all of this kerfuffle last week…”

“Kerfuffle? Oliver, I don’t follow.”

“Well, that awful article that came out…”

Wilson clenched his fist. Lyall half-expected it to come slamming down on the desk. Wilson was bursting to say something, but he managed to stay silent, jaw set, eyes narrowed, as he continued to listen.

“Oliver,” said Lyall. “Didn’t I explain that to you on Friday? The
Herald
’s a well-known muckraker.”

“I know, Lyall. Frightful. Don’t worry, we have the same over here. Every day, Lyall, one of them has a young lady on page three who’s completely topless. That’s what they have to do to attract readers. And the sad thing is, that’s the best part of the paper. Only bit worth looking at.”

“Oliver,” said Lyall, “the article was pure slander.”

“I don’t doubt it for a second.”

“So? What are we saying here?”

“Well, your share price, if I might be so bold … it did rather stumble somewhat.”

“It was halfway back by the close. I’d expect it to be all the way back up by the end of trading today.”

“I wouldn’t be at all surprised,” said Trewin affably.

“The market will go back and look at the results we put out, Oliver. That’s what matters.”

“Yes. Excellent results. Excellent! I wouldn’t mind being able to put out a set like that myself from time to time.”

“Damn right he wouldn’t!” whispered Wilson. He was sick of Oliver Trewin with his British understatement and slightly too-smooth agreeableness. He regretted that it had already been agreed that Trewin would leave the company when the deal was done. He would have enjoyed sacking him.

“So?” said Lyall.

“It’s just … there’s rather a lot of volatility, Lyall,” said Trewin. “I suppose we’d prefer to see rather less volatility, considering that quite a proportion of what you’re offering us is in the form of shares. Up, down, down, up … you understand what I mean.”

“Ask him who’s saying this,” whispered Wilson very softly.

“Oliver,” said Gelb, “let me ask you straight. Is that your opinion, or is that Andrew’s?”

There was a pause. Mike Wilson leaned forward until he was only inches from the phone, trying to hear if anything was being said in the background on the other end of the line. He stabbed at the volume button, turning the sound up as far as it would go.

“Well, we did have some discussions with our chaps from Morgan Stanley over the weekend,” said Trewin.

Wilson sat back in his chair violently.

“I can’t divulge those, of course.”

“Of course not,” said Lyall, glancing at Wilson, who looked as if he was going to pick the phone up and smash it to pieces.

“I believe Andrew spoke to our chairman over the weekend. Now, no need to worry, Lyall. I think we’re just looking for a short period of calm and reassessment. I don’t think we’ve got a major problem here.”

“The hell we don’t!” hissed Wilson.

“Lyall? Did you say something?”

“Umm … Oliver, this is a little surprising,” said Lyall, playing for time and looking at Wilson to see what he wanted him to do next. But Wilson’s face was a mask of pure, cold rage. “I mean … you know, our guys are over there right now. Perhaps you could have told us…”

“I believe Andrew took the decision early this morning,” replied Trewin. “Don’t quote me on that, but I believe that was the case. And it is still rather early now with you. I imagine he just thought he’d leave it a little longer before calling. I think he was planning to call Mike Wilson at … ah … nine o’clock your time. That would be three o’clock here. Would that be right?”

“Yes,” said Lyall.

“Do you think Mike will be around then?”

Wilson nodded. Then shook his head in disgust. Then nodded violently again, seeing that Lyall didn’t know what he wanted him to say.

“Probably,” said Lyall. “Yes, I’m pretty sure he will.”

“Excellent. I wonder if you could let him know?” said Trewin, and Lyall wasn’t sure he couldn’t hear a note of amusement in Trewin’s voice as he said it, as if he knew that Wilson had been sitting there all along.

Wilson got up as soon as Lyall had cut the connection.

“They’re fucking with us.” He paced violently around Lyall’s office, then threw himself into a chair. He said it again, more loudly this time. “They’re fucking with us!”

Lyall watched him.

“They figure they’ve got a chance to screw us.”

“Possibly,” said Lyall. He glanced at his watch.

“What is it?” demanded Wilson. “Why the hell do you keep looking at your watch? Somewhere else you got to be, Lyall? You got something that’s more important than this?”

Lyall shook his head.

“Damn right you haven’t!” Wilson stood up again. “Come with me.”

He opened the door to Lyall’s office. It was after seven now. Other people were arriving for work. From somewhere along the corridor, they heard the voices of a couple of junior executives bantering about what they had done over the weekend.

Back in his own office, Wilson got Pete Stanzy on the phone.

“Pete, you were right,” said Wilson, without any preliminaries. “They’re fucking with us.”

“What happened?” asked Stanzy.

“We talked to Trewin, their finance guy. Lyall here talked to him.”

“Hey, Pete,” said Lyall.

“Hey, Lyall. What did he say?”

“They’re worried about the stock price. They want to wait and see—”

“They’ve been talking to Morgan Stanley!” interjected Wilson. “They’ve been talking to them all weekend. Then fucking Bassett spoke to his chairman and they’ve shut down the data room.”

“Until when?”

“Who knows? Bassett’s calling me at nine. According to Trewin, he was going to do it anyway. I bet he was listening in on everything we said.”

“Wait,” said Stanzy. He was in his office on the thirty-fourth floor. In New York, it was after eight. “Let me get this straight. They’re saying they’ve reacted to the stock price. But at the close it was only three bucks down from where it was before the article came out. And that was
up
a dollar eighty with your results. So it’s only
one-twenty
down from where it was when you agreed the deal with them. And our projection is it’s easily going to be back up to that point by the close of trading today.”

“I told them that,” said Lyall. “It’s the volatility they don’t like.”

“Yeah,” muttered Wilson. “And if it wasn’t the volatility, it’d be something else.”

“So they’ve put things on hold and Bassett’s calling you at nine. Is that what you said?” asked Stanzy. “Is that nine o’clock your time?”

“Jesus Christ, Stanzy, let’s get to the point! What difference does it make what fucking time he calls me?”

“Yes,” said Lyall. “Nine o’clock our time.”

“They’re shopping themselves around,” said Wilson. “Huh, Stanzy? Right? That’s what they’re doing.”

“Possibly.” Pete Stanzy gazed out through the glass wall of his office at the associates hunkering over their computers in the bullpen. His mind was working fast, crunching through the possibilities. “That’s one possibility. Their bankers will be telling them they can get more.”

“More than twelve-point-five? Plus our break fee?”

“That’s what they’ll be telling them,” said Stanzy, who had done precisely the same thing himself dozens of times, and had sometimes even gotten clients to believe him. “They’ll be saying they can get more. They’ll be looking for five to ten percent of the difference as a success fee, so they’ll be pushing that line hard.”

“You fucking investment bankers!”

“That’s how it is, Mike.”

“Jesus!” said Wilson. “Bassett would have to be a hell of a lot dumber than I thought to fall for that. They’ll never get it! That’s why we went in at twelve-point-five, right? To stop them from doing this.”

“Morgan Stanley’s got nothing to lose. If they can get a bidder to come up with another billion, that’s a hundred million for them. It’s all upside. You’ve gotta expect them to try it.”

“Morgan Stanley may have nothing to lose,” retorted Wilson, “but Andrew Bassett sure does.”

“What’s that, Mike?”

“Us!”

In his office, Pete Stanzy nodded. That was precisely the point, and he was glad Wilson had gotten there himself. “Exactly. Mike, that’s what we’ve got to use. That’s our strength.”

“What else?” demanded Wilson hungrily. “Come on, Pete. Hell, you’re an investment banker. You know how you bastards think. What else might they be doing?”

“Well, they might not be shopping themselves around. They might just be trying to get more out of us.”

Wilson laughed incredulously. “Do they really think…?”

“We’ve gone in high; they might think we can go higher.”

“Their board’s approved it!”

“No, Mike,” said Stanzy, “their board’s approved it conditionally. They might be treating it as a floor.”

“See, I told you these bastards were screwing us!” muttered Wilson to Lyall Gelb.

Stanzy gazed at the bullpen. What else did Wilson expect? Buffalo was trying to screw Leopard, but that was only because Leopard was trying to screw Buffalo. That’s what deals were about. That was what made them fun. In addition to the fee. And this was one fee Pete Stanzy wasn’t going to let go of. He was going to hang on to it with his fingernails, if necessary. Or with Mike Wilson’s fingernails, to be more accurate.

“Again, say they are trying to jack up the price,” said Stanzy. “What do they stand to lose, Mike? Us, right?”

“Damn right.”

“Whichever way you look at it, that’s our card. They can shop themselves around, they can try to jack up the price, but there’s a cost. They’ll lose us. And do they
really
think they’re going to get a better deal? That’s what they’d have to believe, right? That’s what it comes down to. Because they’ll
lose
us. You gotta call their bluff, Mike. Do they really think they’re gonna get someone to come in and put more than twelve-point-five on the table? Do they really, really believe that?”

“They couldn’t,” said Wilson. “They’d have to be fucking crazy.”

“Exactly.”

“Hold on,” said Lyall. “What if they’re telling the truth?”

There was silence on the phone. Wilson stared at Lyall as if he’d just landed from Mars.

Pete Stanzy’s voice came over the speakerphone. “What are you saying, Lyall?”

Gelb glanced at Wilson. “Let me play devil’s advocate. What if they really are just worried about the stock price? What if Morgan Stanley’s said to them, You know what, this is a great price, but it’s got a whole bunch of stock in it, and right now that stock’s going up and down like a yo-yo, and maybe you’d better just … have another look at it.”

“Bullshit,” muttered Wilson.

Pete Stanzy thought about it. That was the soft point in the deal, as it is in any acquisition that isn’t paid for with a hundred percent cash. There’s always going to be room for dispute over the true value of the acquirer’s stock in relation to the stock of the target. Even when the stock price stays steady, a deal can fall apart over that. Stanzy had seen it happen plenty of times.

He thought about what John Golansky had said to him. Why don’t they wait until they put out their next set of results, reassure the market? That was Bruce Rubinstein talking. Stanzy wouldn’t dare even raise that question with a client. What if the client said yes?

“We could increase the cash component,” said Wilson.

“No,
”
said Stanzy.

“We could push up the cash some and see if that makes them happier.”

In his office, Stanzy stared at his phone in horror, as if he could hardly bear to hear what was coming out of it. He was just thankful John Golansky wasn’t there to hear it. Four-point-two billion was enough. More than enough. It was already looking hard to get.

“Mike,” he said, “hold on. Just … keep it in perspective. You’re the one in the position of strength here. You’ve offered them a price they’re never going to get from anyone else. Right? Never! You’re the one who holds the cards. No more cash. You don’t need it. Same stock-to-cash split, two to one. They procrastinate, they lose you. Let’s stick with that. That’s our line. They delay, you’re out of there.”

“Yeah, okay,” said Wilson.

“Did you hear me, Mike?”

“I heard you!” retorted Wilson in irritation.

“Okay. All right. Just don’t talk about any more cash.” Pete Stanzy paused, wondering whether he should tell Wilson about the difficulties Golansky was having in getting the bridge loan set up. But Wilson didn’t sound in the mood for that right now. “He’s going to lose you, Mike, that’s what you’ve got to remind him. For Bassett, it’s now or never. That’s how you’ll hook him. Trust me.”