Slowly.
At last he finished the scotch. He grabbed his jacket and headed downstairs.
The doorman flagged down a cab for him.
* * *
It was a tall, stucco-coated terrace building in Knightsbridge. Mike Wilson had been there before.
He paid the cabbie and got out. A doorman in a top hat was standing at the top of the steps. He opened the door. Inside was a hallway, black-and-white tiles on the floor, wood panels on the walls, with an open doorway on the other side.
“Good evening, sir,” said a young woman in a black dress, blond hair pulled back in a ponytail. She got up from a small desk. “Are you a member?”
Wilson couldn’t remember seeing her before. “Why don’t you tell your manager Mr. Wilson’s here,” he said quietly. “Mike Wilson.”
The woman glanced at a black man in a suit who was standing on the other side of the hall. “Would you wait here a moment?” she said to Wilson, and disappeared through a door in the wood paneling behind the desk.
Wilson glanced at the black guy and smiled. The black guy smiled back at him. Mike Wilson walked farther into the hall, conscious that the black guy was watching him. He stopped at the open doorway.
There were about ten tables in the room ahead of him. Roulette, blackjack, craps. Croupiers stood behind them. The room wasn’t crowded. Slow night, perhaps. But it made no difference to Wilson. His pulse raced. His throat was dry.
He watched. He was in the last, most delicious stage of resistance. Somewhere in the back of his mind, he knew he could still turn around and leave. He would hold on to that thought for a little while yet, intensifying the pleasure, heightening it, like holding off an orgasm, before he abandoned himself. It was better than sex.
“Sir?”
Mike Wilson turned with a start. The young woman had come back. A man in a tuxedo was with her.
“Mr. Wilson,” said the man, oozing an unctuous smile.
Wilson nodded impatiently.
“Lovely to see you back, sir. Awfully sorry about the delay. Melanie’s new.”
The young woman smiled apologetically.
“Well, we can’t blame her for that,” said Wilson.
“Very understanding, sir.” The man motioned Melanie away and she went back to her desk. “Come this way, Mr. Wilson.”
The man led him into the room beyond the hall. They walked briskly between the tables. On the other side of the room they went through a door and came to a staircase. The manager led the way up the stairs. At the top, there was a door on each side. The manager opened the door on the left.
“After you, Mr. Wilson. I’ll just make a phone call, shall I?”
Wilson nodded. “Make it two hundred.”
“Sterling?”
Wilson nodded again. He went inside. The room was large, with two tables. There was a bar, and a couple of women circulating with drinks, and a couple of men standing to the side and watching the tables. Most of the players at the tables were men. One was a woman who was wearing a white trouser suit. She glanced at him. Wilson met her eyes, then kept looking around the room.
The manager returned. “Mr. Prinzi was very happy to oblige.” He placed a pile of chips in Wilson’s hand. “Two hundred thousand pounds, Mr. Wilson.”
Wilson nodded, eyes on the tables.
“Just ask someone to let me know if I can be of further service, sir. Any of the staff, Mr. Wilson.”
The manager waited a moment, then left. Mike Wilson gazed at the tables. He felt the chips in his hands, cool, smooth. The woman in the trouser suit glanced at him again, but now he was utterly unaware of her.
The last shred of resistance tore away.
15
The sideboard was stocked with coffee, juice, pastries, and fruit. Between eight-thirty and nine on Wednesday morning, the members of the Louisiana Light board of directors arrived in the boardroom on the sixth floor of the company headquarters in Baton Rouge. Mike Wilson greeted them genially, exchanging a word with each one about family, business, golf, laughing warmly at the pleasantries. There was nothing to show that he was a man who, thirty-six hours earlier, had lost the equivalent of a hundred and eighty thousand dollars of borrowed money in a London casino.
At nine they took their seats. The board consisted of eight members. Mike Wilson, Lyall Gelb, and Stan Murdoch were the executive directors. Ed Leary, the chairman, headed the five non-execs. Dave Ablett was CEO of Ventura, a Boston-based software company. Gordon Anderton was managing partner of Anderton Doolittle, the international recruitment firm. Mal Berkowitz was CEO of Tufts Engineering, in civil engineering and construction. And Imogen DuPont was a former Louisiana Secretary of Environment, now a senior partner in Molyneux, Garth, Porter & Cabel, the biggest law firm in Baton Rouge. Everyone, with the exception of Imogen DuPont, would have described himself as a personal friend of Mike Wilson. Every one of them, including Imogen, had benefited from some kind of consultancy or business arrangement with Louisiana Light, and confidently expected to continue to do so.
Doug Earl, the company counsel, attended the meetings and took the minutes. Donald Lepore, the sales and marketing director, and Hannah Grainger, the head of personnel and corporate affairs, were other nonboard members who usually attended, but the previous day Wilson had asked Stella to let them know they wouldn’t be needed at this one.
Ed Leary called the meeting to order, then handed over to Mike Wilson.
“When you look at the agenda,” said Wilson, “you’ll notice there’s been a slight change since the board papers were sent out to you.”
A couple of the directors had already opened the files in front of them. Now everyone else did.
“We have a very exciting development to discuss today. Ed has kindly allowed me to adjust the agenda to be sure we cover it, right, Ed?”
Ed Leary nodded.
“You’re not trying to get out of showing us the results, are you?” said Mal Berkowitz, and he grinned. Every board has a joker. Mal Berkowitz was Louisiana Light’s.
“Not at all,” said Wilson, grinning right back.
“No surprises, I hope?”
“Only good ones, Mal.”
Mal Berkowitz laughed. “Them’s the ones I like,” he said, and he moved his eyebrows up and down quickly in what he thought of as his Groucho Marx impression.
“What is this?” whispered Stan to Lyall Gelb, who was sitting beside him. He pointed at the first agenda point. “Acquisition of BritEnergy. You know about this?”
Lyall didn’t reply.
“Ed’s allowed me to deal with the new point first up,” said Wilson. “Now, as you can see, it’s an acquisition.” He paused. “Quite a sizable acquisition. As you know, we’ve agreed on the need for a new global strategy, and that strategy is based on the idea of acquiring a partner based in the European Union who can fill the key gaps in our portfolio. Well, you may be surprised to know how far advanced we are in the process. Pleasantly surprised,” he said, with a nod to Mal Berkowitz. “There’s quite a pressure of time, which is why we couldn’t get a paper to you earlier. Lyall’s now going to give you each a copy of the relevant document, and I’m going to ask you to leave it behind in this room when you go this afternoon. Not that there’s a trust issue,” added Wilson, as Mal Berkowitz started rolling his eyes and was obviously about to make a quip. “Confidentiality’s paramount, that’s all, and we have a fiduciary duty to take the standard precautions.” He glanced at Gelb. “Lyall?”
Gelb pulled a set of documents out of his briefcase. Stan Murdoch watched him. Lyall went around the table, handing a copy to each person. He had personally photocopied them that morning, and each one was individually numbered. The document was a slightly altered version of the Dyson Whitney PowerPoint presentation that Wilson had taken to Andrew Bassett two days earlier.
The atmosphere in the room had changed utterly. There was a palpable sense of expectation.
Lyall sat down.
“What the hell is th
is?” whispered Stan Murdoch.
Lyall nodded toward Mike Wilson.
“I’m going to leave you while you look at the document. Please read it carefully. If you have any questions, make a note of them, and I’ll take them when I come back.”
“I have a question,” said Imogen DuPont.
“What is it?” said Ed Leary.
“You’ve given us a document to look at, Mike. What exactly are you asking us to do today?”
Leary looked at Mike Wilson.
“I’m asking you to vote on it.”
* * *
When Wilson came back, the atmosphere in the room was concentrated. Most people at the table were still reading through the document. Wilson had given them slightly less time than he figured they would need in order to finish it. He didn’t want discussion starting without him.
He waited a few more minutes. Then he glanced at Ed Leary. Ed cleared his throat. Imogen was still reading. She was the last to look up.
“I’m gonna take questions first,” said Wilson. He looked around, waiting for someone to start.
There was silence. That was either very good, Wilson knew, or very bad.
“Nothing?” He waited a moment longer. “Hell, I knew it was good, but I didn’t realize it was this good. Let’s take the vote right now, huh, Ed?”
Ed Leary was startled.
“Only joking,” said Wilson. “All right, let me run through everything quickly and see what we have to talk about. BritEnergy, as you will have seen by now, is a first-class company with a first-class portfolio of international assets.” Wilson turned the pages of his own copy of the document. The first couple dealt with BritEnergy, its history, reach, and operations. “Why don’t we go straight to page five?”
Page five showed a map of the world with the Louisiana Light and BritEnergy assets represented by tiny images of their corporate logos. The arc of assets ran up from Chile, through the United States, across to Britain, through Europe, and down through Asia to end in southeastern Australia.
“This just about sums up the rationale for the deal. We’re talking generating plants, wires, retail operations. I think you’ll agree this creates an impressive portfolio. In fact, I think it’s unmatched by any other company in the industry.”
“It’s the whole damn world,” murmured Mal Berkowitz. Beside him, Dave Ablett nodded.
“The deal gives us an integrated company with financials that are very robust,” said Wilson. “Turn to the next page.”
Page six showed a proforma profit-and-loss statement for the combined Louisiana Light and BritEnergy company over the next two years.
“Now, we’ve used conservative assumptions,” said Wilson. “We’ve assumed an average five percent cost savings in corporate center heads and other compressible costs. That’s certainly less than we’ll actually achieve. We think we’ll get ten, and probably fifteen percent if we squeeze. The bankers wanted to factor that in but I said no, let’s go conservative, just do the numbers with five percent. But the point is, we’re talking cost savings as well as the strategic logic of putting the two portfolios together.”
“So these figures show five percent?” asked Dave.
“Correct,” said Wilson.
“What about the balance sheet?”
“You’ll have seen that on the next page.”
Mal Berkowitz nodded. “This is good.”
“They’re very strong on the balance sheet,” said Lyall Gelb. “That’ll help us with … you know, our issues, and it means we can finance the acquisition in the capital markets and still reduce the overall leverage of the combined company.”
“I think what Lyall’s saying is their balance sheet is strong enough to carry the extra debt we’ll need to take on when we buy them,” said Wilson. He paused. The cash they would need to finance the acquisition was the big point, he knew. “Let’s go to the next page.” He waited, watching them.
“I wasn’t sure about this,” muttered Dave Ablett. He glanced at Mal Berkowitz for a second, and then scanned the page, frowning. “Is this right, Mike? You’re actually talking about—”
“Correct. Four-point-two billion,” said Wilson crisply. There was no point being defensive about it. Talk it up, like it was something to be proud of.
Dave was still studying the page. Mal, studying it as well, whistled softly. Wilson glanced at Imogen DuPont. She was watching Dave and Mal. Gordon Anderton caught Wilson’s eye and smiled.
“Let’s be clear,” said Wilson. “The offer is eight-point-three billion in stock, four-point-two billion in cash. I’m rounding a little. At current stock prices, the stock swap we agreed is around five to two. Five-point-one to two, to be exact.”
“Mike,” said Dave Ablett, “I wanted to ask you, where does this come from?”
“Which part exactly?” said Wilson.
“The valuation. We’re valuing them at twelve-point-five billion, right?”
“That comes from Dyson Whitney.”
“Dyson who?”
“Our investment bank,” said Wilson. “They’re advising us on this.”
“I thought we use Merrill.”
“Dyson Whitney has a strong electricity specialty. I’ve been a little disappointed with Merrill.”
“So this is their valuation?”
“Correct. I’ll be honest with you. We’re toward the top end of their range. But this isn’t a bargain hunt, Dave. This is a quality acquisition. I don’t want to put this company in play, I want to buy it. And I don’t want to get into a bidding war.”
“But this company … it’s kind of…”
“What, Dave? Big?” Wilson laughed. “Damn right, it’s big.”
“Maybe rather than buying it we should be looking to have some kind of a partnership.”
“You mean a merger? Why merge when we can buy ’em?”
“Can we? You’re sure?”
“Yes. I met with Andrew Bassett, the CEO of BritEnergy, in London on Monday. This is an agreed bid, Dave. These are the exact terms Bassett’s taking to his board tomorrow.”
There was silence. Only now did the board members realize how far the matter had actually advanced. It was almost a done deal.
Ed Leary watched Dave and Mal closely to see how they were going to react to that. Besides him, they were the only non-execs who gave any real input on business issues. Gordon Anderton, the headhunter guy, never had anything to say unless they got onto the soft stuff. Imogen DuPont, who had recently left the state administration, was window dressing, a potentially useful conduit to her friends in the Democratic Party. It was only her third board meeting. She knew a lot about rules and regulations and very little about business. Stan Murdoch hadn’t said anything, but Stan never said much in board meetings, and Leary didn’t expect him to. He assumed Stan must have already known about the deal. Ed Leary had no idea that Stan hadn’t been aware of it before sitting down at the board table that morning.
Lyall Gelb could feel Stan Murdoch’s eyes boring into him.
Dave and Mal glanced at each other. Like Ed Leary, they were out of their depth. These were the kind of numbers they only dreamed about. When it came to adding $4.2 billion in a single chunk of debt, they didn’t know where to start. But neither of them wanted to show it.
Imogen DuPont spoke up. “Shouldn’t you…” She looked at Ed Leary in consternation. “Shouldn’t this have been cleared with the board first? I mean, before it got to this stage?”
“Well, Imogen,” said Leary, “sometimes there are pressures of time…”
“You could have convened a telephone conference.”
“We had to move very fast on this,” said Wilson. “I don’t think we want to get caught up in the technicalities.”
“No,” said Ed Leary. He laughed a statesmanlike, paternalistic laugh. “We don’t want to get legalistic, Imogen.”
Imogen looked at the others for support. Glances shifted uneasily.
“Why don’t we move along?” said Wilson. �
�You’ll find some of the key staffing issues on page fourteen. I’ll remain the CEO, Andrew Bassett will be COO. Stan’s director of operations for U.S. and International. Their current COO, Anthony Adams, gets UK and Europe.” Wilson paused for an instant, glancing at Stan Murdoch. Stan was staring at the document. His jaw was set tight. “Lyall stays CFO. Their finance guy is ready for retirement and he goes.”
Lyall nodded.
“We’ll keep two heads of personnel for the moment. Makes sense given the differences between us and the UK. Our strategy position is vacant so we’ll keep their guy. Gordon, you want to put our search on hold?”
“I’ve got a shortlist, Mike.”
“Well, the shortlist just got shorter. Don’t worry, Gordon, there’s plenty of other work we’ll need doing. What else? Company counsels,” said Wilson, with a glance to Doug Earl. “Again, we’re going to keep both, given the regulatory differences.”
Doug nodded.
“Now, I know what you really want to know. As far as the board goes, initially we’ll have a shared structure. Just put the whole two boards together. Ed’ll be chairman. Their chairman, Sir James Duncan, will be deputy. All of you will be on it.”
“Where will we meet?” asked Mal.
“London and here. We’ll take turns. At some point we’ll rationalize the board.”
“But we’re buying them, right?” asked Mal.
“Definitely. Legally and, more importantly, in the business itself. We’ve got the chairman, the CEO, the CFO,” said Wilson, numbering the posts off on his fingers. “All three of the main jobs. Plus a majority of the board. Hell, I’d say that’s an acquisition, wouldn’t you?”
Mal grinned.
“But we want to do this friendly, not hostile. We’ve got to make it easy for them. The last page shows a proposed timetable for the acquisition. All going well, we see it being consummated in ten weeks.”
Mal Berkowitz let out an appreciative whistle.
“That’s right. Not bad, huh? Ten weeks, you’ll all be on the board of a twenty-three-billion-dollar company.” He glanced around the table. “Ladies and gentlemen, for a transatlantic deal, I believe this is as good as it gets.”
Due Diligence: A Thriller Page 11
