The Takeover

by Stephen W. Frey

  “Why go through that trouble? Why not just kill him after the takeover has been effected? Why can’t he just have a terrible accident the way Filipelli did? I’m sure Phoenix Grey can arrange that.” Devon Chambers’ breath was labored as he spoke.

  “We don’t want any questions. None. It has to look natural in this case. He must be discredited. And he must suffer. Physically and mentally.” Winthrop rose to his feet and pounded the table. “I want that little bastard to suffer!”

  The room became deathly still.

  17

  Rain, driven by violent gusts of wind, pounded the windows of Falcon’s two-bedroom apartment. He opened the living room window as far as it would go, kneeled on the parquet floor, and pressed his nose against the damp screen. He surveyed 82nd Street from his perch ten stories above it. Far below, people scurried to their jobs. Hunched beneath umbrellas of all sizes and colors, they careened off one another in their mad rush to get to work.

  As he peered down at them, Falcon was reminded of those childhood times when he had been condemned to the indoors by his father for a violation of some trivial household rule, forced to watch playmates outdoors from the window of his room. Charlie Richards. His father. Buddy, they called him down at the foundry. Buddy the bastard. Never smiled, never tried to make friends with anyone. Which was why so few people attended his wife’s funeral. Nobody cared.

  Falcon swallowed. His mother had been a sweet woman, her main concern the family—Buddy, Andrew, and the little girl, Sara. But Buddy was a tough man. And mean. He had abused her constantly. Perhaps it was better that she had run off the road that night coming back from a visit to her mother’s home in Trenton. Falcon had always wondered whether it had really been an accident. There were no skid marks in front of the tree. But she would have known that she was killing Sara too—and she would never have done that.

  Jenny’s mother had died young also, one of the many things that had drawn Andrew to her. They had talked for hours about how it had affected Jenny growing up, making her stronger in some ways, weaker in others. About how she was convinced that someday they would be reunited in the afterlife. And in all that time Falcon had never told Jenny about his mother’s terrible accident. Because he could never allow himself to become that close to anyone.

  Falcon focused on one of the figures below him. He was different. He had no umbrella and was in no mad rush to get anywhere. In fact, he lay sprawled atop a blue sedan, arms raised to the heavens, laughing hysterically as the skies poured down on him. He recognized this man. It was West Side Willy, a huge, homeless man who regularly terrorized Upper West Side residents with his demands for cash and his filthy, intimidating appearance. Once a week the police would arrest West Side Willy for disturbing the peace or indecent exposure, but inevitably he’d be back on the street within twenty-four hours because he never committed a serious crime—which was nothing short of rape or murder in New York.

  Suddenly, with no warning, the huge man leaped from the hood of the car and, screaming like a maniac, raced crazily at a group of people huddled together awaiting the crosstown bus. The human mass parted as he tore through them, then rehuddled immediately, slightly closer together now, for protection. West Side Willy stopped, turned to look back at the group, threw his hands into the air, and screamed more loudly than before. Then he ambled off, casually kicking cars as he walked away. Falcon shook his head and laughed. There was always one of a kind. Unfortunately, in New York City, it was usually more like a thousand.

  Falcon rose from his kneeling position with a groan. He was exhausted. He had been working around the clock to meet Chambers’ Wednesday deadline. He and the attorneys had completed reams of paperwork; SEC documents, antitrust documents, bank credit agreements, the underwriting agreement for the junk bonds, and of course the offer to purchase—part of which would appear in all of the newspapers tomorrow morning, and the full copy of which would be mailed to every Penn-Mar shareholder of record as of the end of business today. He would have to review the offer to purchase one more time this morning before it could be sent to the Financial Chronicle, the Wall Street Journal, and the New York Times to be typeset.

  Tomorrow morning the announcement would appear in those newspapers, telling the world of Veens & Company’s intention to purchase any and all shares of Penn-Mar Chemicals. It would be the biggest leverage buyout of all time, eclipsing KKR’s purchase of R. J. Reynolds in 1989. In fact, it would be the biggest acquisition of all time, period. Falcon laughed. They had put this thing together in less than three weeks. That was incredible. Even more incredible, he stood to make five million dollars. Please, God, just in case you’re out there, let this one happen. It was funny how a man could so suddenly find religion.

  Falcon moved into the apartment’s small kitchen. Twenty-three hundred dollars a month and the refrigerator door only opened halfway. But that was New York. Love it or leave it because it wasn’t going to give you any sympathy.

  He pulled a half-full carton of milk from the refrigerator, lingering long enough at the door to take note of the disarray inside—thanks to Alexis—then shut the door and poured the milk over a bowl of Rice Krispies. As he listened to the cereal pop, a thrill surged through his body. Tomorrow he would announce the largest takeover in Wall Street history. Incredible.

  It was zero stage. That was what he called it. The point at which the transaction took on a life of its own. You became reactive instead of proactive. The pace of the deal became supersonic, and you simply held on for the ride. So many things began to happen simultaneously that it became difficult to maintain control. But that was when a savvy investment banker earned his huge fee, maintaining absolute control over every aspect of what was going on. The investment banker became part psychiatrist, part army general, and part poker player. But above all, he maintained his calm. Traders could explode in volcanic eruptions, but not investment bankers. It was why Falcon had so easily gravitated toward this career. He maintained his calm naturally.

  Zero stage. The Penn-Mar transaction had reached that point. Once the deal was announced to the Street tomorrow, everything would explode, and Falcon, Barksdale, Chambers, and everyone else even remotely involved would be swept up in the maelstrom. And what a maelstrom this was going to be.

  He sensed Alexis’s presence and looked up from the cereal. She stood before him stark naked. That was how she felt most comfortable in the apartment. She was unabashed by her exposure. It was a trait common to models, Falcon guessed, to be as comfortable fully dressed as naked. In any situation.

  “Good morning, Falcon.” Her voice was neither friendly nor unfriendly. She moved to him, gave him a quick peck on his unshaven cheek, and then squeezed past him to the refrigerator.

  He watched her bend down to take out bacon and eggs. She had been helpful over the last several days, he had to admit. She had stayed out of his way and allowed him to work, realizing the importance of the endeavor. She had even cooked a dinner or two, and she hated to fix anything other than breakfast.

  Alexis placed the food on the counter, then with much banging and crashing removed the pots and pans she would need to fix the meal. She glanced over at him. “Want some?”

  Falcon shook his head and smiled.

  She turned on a burner. “What’s so funny?”

  “You should start a cooking show on one of those five hundred new cable channels we pay so much for. You’d be a huge hit. Of course, we’d have to get you some kind of outfit. Maybe a see-through apron, with The Cook Looks Good Enough to Eat on it. That show would rake in the cash. I certainly wouldn’t have to worry about being an investment banker anymore.”

  Alexis laughed. “What would you call it?” She dropped a huge piece of butter in the pan.

  “How about the ‘Godiva Gourmet’?”

  “Ooooh, I like that. Would you be my agent?” She dropped the entire package of bacon into the pan without pulling it apart.
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br />   Falcon was always amazed at the fact that she could eat as much of anything as she wanted and never gain weight and never incur skin problems. Other models he had known developed deep psychological problems because they were so obsessed with their diets. Not Alexis. “If you pull the strips apart, they cook more uniformly.”

  “I don’t care about uniforms, Mr. Neatnik.” Her voice lost its playful tone. “Not all of us are anal retentive about neatness. I mean, my God, every suit in your closet has its own special hanger and its own special place. As do your shoes, shirts, socks, and ties.”

  He was easily her match. “Not all of us can function as complete slobs. I’d appreciate it if you’d straighten up the refrigerator after you’ve finished grazing. There’s an avocado in there that’s got more culture than the queen of England.”

  Alexis slammed the tongs she had been holding onto the counter, but did not look at him. Falcon backed out of the kitchen. He did not need an argument now. He had made his point and that was enough.

  He moved to the desk with his bowl of cereal and surveyed it for a moment. Neat as a pin, he thought with pride, even in the midst of the biggest LBO in history. Organization. That was the key to success. That and about a million other things. Including a good deal of luck.

  Falcon placed the bowl on the desk and scanned the front page of the morning’s New York Times. He began to pull out the chair so he could sit down, but never did. His eyes were riveted on the headline: CHAIRMAN OF FEDERAL RESERVE DROWNED IN MONTANA.

  Falcon blinked, and as he stared at the words, an eerie sensation crawled slowly up his spine. He shivered involuntarily as the sensation finally made its way to his neck and the base of his brain. Falcon had considered Filipelli the single biggest stumbling block to completing the Penn-Mar takeover. Filipelli could have intimidated the banks who had committed to fund the deal into backing out, and Veens and NASO would have been dead in the water, without enough money to pay for the shares. Filipelli was that powerful.

  He had worried constantly about Filipelli and had voiced the concern to Chambers. Time and again Chambers would pass off Falcon’s concern as trivial. Chambers was more worried about a competing bid from another large multinational chemical company. Falcon had wondered how Chambers could take such a cavalier attitude toward the threat of the Fed. Maybe he was staring at the answer.

  Falcon stared at the page, and the words blurred before his eyes. Carter Filipelli was dead. This was crazy.

  * * *

  —

  The green-and-white golf umbrella was obnoxious because it was so huge. But it kept Falcon dry under the onslaught of the pouring rain. Other pedestrians, less fortunate beneath their traditional-size shields, threw sarcastic remarks in his direction as they were forced to move aside before him.

  Falcon moved past the Portland Hotel. He could have made the call from the lobby as he had before, but he was hungry. There was a delicatessen with a phone just three doors down the street. The deli served a delicious breakfast of eggs, bacon, toast, and the best home fries in the city. And he was still ravenously hungry. The bowl of Rice Krispies hadn’t done the trick.

  Carter Filipelli was dead, drowned in Montana, only days before the public announcement of the Penn-Mar takeover. It seemed so convenient. Perhaps he was just paranoid. Still, he wasn’t going to make this phone call from the apartment. He was sniffing the five million now, and if Boreman and Barksdale found out that he was trying to track down the origin of the billion dollars the Germans were putting into the deal, they might fire him. Or worse. And there would go the Vermont farm, financial security, and everything else.

  Falcon had checked both telephones in the apartment thoroughly for listening devices and found nothing, though he had to admit that he probably would not have recognized one if he had seen it. He knew so little about electronics, mechanics, engineering, and other real-world things. That was the curse of most investment bankers. They knew a little about a lot.

  They could have put a bug into the computer or the Bloomberg terminal before delivering the equipment. It was even money they had some kind of listening device somewhere in the apartment. They didn’t know him well and therefore didn’t trust him. They had told him as much.

  The Germans. Like the wire transfers, he had been trying to track them down too, but with no success. There was no record anywhere of a German-based investment firm called Westphalia Nord, Veens’ supposed affiliate. His friends were still checking, but they did not anticipate finding anything. There was no record of a Werner Prausch either. Falcon had not seen or heard of him since the boardroom meeting Friday.

  Veens & Company checked out, though it had not made the several acquisitions Chambers claimed. Veens had purchased only a tiny plastics manufacturer three months ago for six million dollars. And that was it. Not a stellar record.

  Falcon moved through the door of the deli and out of the rain. The smell of frying bacon filled his nostrils, and his stomach gurgled. He shook the rain off the umbrella onto the floor, much to the consternation of the Mexican behind the counter.

  “Two eggs over easy, bacon, toast, and home fries.” Falcon called the order as he moved toward the counter. It was almost ten o’clock and the deli was quiet, catching its breath between the breakfast and lunch rushes.

  The Mexican stared at him. “You want coffee?” The man spoke with a nasal twang. His expression remained impassive.

  “Yes.”

  The man turned and screamed something in broken English which did not sound at all like what Falcon had just ordered. But that was how it always was, and somehow they got him the right food. The man behind the grill grunted, dropped his cigarette to the tile floor, removed a huge hunk of white lard from an ancient-looking silver-colored pot, and began to spread it over the cooking surface. Falcon looked away quickly. It was like what they always said about sausage—if you saw how it was made, you wouldn’t want to eat it.

  After ordering the meal, Falcon went to the phone booth. It was slippery with grease, and Falcon was suddenly sorry he had not used the phone in the lobby of the Portland. He dropped a quarter into the slot, punched the number, and listened to the ringing at the other end.

  “Eddie Martinez, Funds Transfer.”

  “Eddie, it’s Andrew Falcon.”

  “Hi, Mr. Falcon.”

  “Have you found the wires yet?”

  “Nothing yet, and I been looking real good.”

  “Damn it.” Falcon glanced around for anyone or anything that looked remotely suspicious. “Okay, but keep trying.”

  “Sure, sure. Uh, are you back in the bank yet from your seminar?”

  “Not yet.”

  “Sure is a long seminar.”

  “Yeah. Listen, Eddie, please keep trying. It’s very important.”

  “Okay.”

  Martinez hung up the phone. He liked Falcon. Not too many people in Falcon’s position, the white-collar side of the bank, ever treated him with respect. But there was something going on which maybe he should not be a part of. He had a wife and kids to worry about. Perhaps it was time to talk to his boss about this.

  18

  PRESS RELEASE

  Veens & Company, a New York investment firm specializing in strategic partnerships with plastics and chemicals firms, announced this morning, via a press release to all major wire and news services, that effective immediately it will begin a public-tender offer for all common shares of Penn-Mar Chemical Corporation (TICKER PMCC). The offer price is $75 dollars per share. A spokesman for Veens confirmed that the investment firm had bank debt, subordinated bonds, and equity in place to fund the acquisition, and therefore the tender offer is not contingent upon financing. Veens’ lead adviser and co-investor in the transaction will be the National Southern Bank. The spokesman said that principals of the firm anticipate taking possession of the shares sometime in early August, once Williams Act
requirements have been satisfied.

  The New York Stock Exchange. The granddaddy of them all. Its existence enables corporate America to raise billions of dollars a year in equity funds to finance working capital needs, long-term capital projects, and acquisitions. It also provides millions of individuals with long-term investment returns well above those of bonds and money market funds—at least the savvy individuals. And it is the most prolific casino in the world. Though many other stock and commodity exchanges have developed over the years, none compares to the power, influence, and prestige of the Big Board.

  Every investor reaches the floor of the exchange exactly the same way—through a broker. From middle managers with children about to enter college and blue-haired widows concerned with bequests to heirs, to pension fund managers entrusted with billions of dollars of retirement money and portfolio administrators handling the money of those too intimidated to handle their own. Of course, the pension fund manager and the portfolio administrator receive much greater attention and priority from brokers than the middle manager and the widow, because their orders are huge in comparison and the broker can make much more in commissions expending the same exact amount of energy as he or she would to complete a small trade. It isn’t supposed to be that way. Everyone is supposed to be treated fairly. But life is rarely fair in the world of finance.

  After the broker enters the orders onto the exchange’s computer system, it is communicated to runners—low-paid stiffs hailing from a borough other than Manhattan who hope, though they are rarely successful, to learn the secrets of Wall Street by hanging around the Big Board. The runners man banks of brightly colored phones at the perimeter of the great room. Once a runner receives an order over one of the phones, he combs the floor until he locates the firm’s trader, to whom he communicates the order. The floor trader then goes to the appropriate specialist and executes the order. Orders aren’t always executed in the exact same sequence in which they are received. This casino caters to the big spender—as most do.