Due Diligence: A Thriller

by Jonathan Rush

  “Jesus Christ!”

  Wilson sat back in his chair. It was someone who knew something. Must have been. He frowned in thought. Who?

  Mike Wilson picked up the phone.

  “Stella?”

  “Yes, Mr. Wilson.”

  “Get Stan Murdoch in here.”

  * * *

  “Sit down, Stan,” he said.

  Stan sat in one of the armchairs on the other side of the office. Wilson got up from behind his desk and joined him. He hadn’t talked to Murdoch since the board meeting two days earlier. There had been too much to do. The previous day had been taken up with calls to press and analysts, puffing the results. But it had been a mistake to neglect Stan. Mike Wilson saw now how big a mistake it had been.

  “Coffee?”

  “You pulled me out of the production meeting, Mike.”

  “Okay. I get it. I’m sorry. This is important, Stan.”

  Stan waited.

  “Interesting times, huh?” said Wilson, looking for a way in.

  Stan watched him. He was a taciturn kind of man. Never said much at the best of times.

  “You know the old Chinese proverb? ‘May you live in interesting times.’”

  Stan’s eyes narrowed slightly.

  “You know, interesting times … trouble…” Wilson glanced around for a moment, trying to figure out what to say next. “I guess it was a surprise for you, the other day.”

  “The fact that we’re buying a company that’s bigger than us? Yeah, I’d say that’s a bit of a surprise.”

  “You’re not too happy about it, are you, Stan?”

  Murdoch shrugged. “Don’t know too much about it.” He shifted in his seat. “Lyall seemed to know about it.”

  “He was the only one, Stan. Secrecy … you know.”

  “Doug knew about it.”

  “Hell, Stan! Of course Doug knew about it. He’s the general counsel.”

  “You don’t trust me, then?”

  Wilson laughed. “Stan, how long have we worked together?”

  “Long enough,” muttered Murdoch.

  Stan Murdoch was a tall, lean man with tanned, leathery skin and blue eyes. Looked as if he spent all his days physically out in his plants. He didn’t, of course, not nowadays, but he looked like it. Probably would have if he had the chance. Stan was an operations guy. He was a great operations guy, as Wilson knew from their time together at InterNorth, which was why Wilson’s first move when he took over at Louisiana Light had been to headhunt him and bring him over to head up operations. He was a guy who took orders and executed them. Mike Wilson had assumed that’s what he’d do this time around, as he’d always done in the past.

  Wilson got up. He went to his desk and came back with the Herald article. He gave it to Murdoch and sat back in his seat.

  “You seen our stock price?” he asked as Stan read the article. “I just checked. We’re six bucks down.” Wilson scrutinized him closely. “You know anything about this, Stan?”

  Murdoch shook his head. He put the article down. “Where’s it from?”

  “The New York Herald. Some fucking scut sheet.”

  “Why are you worried then?”

  “Because…” Wilson stopped. The quickest way to kill the deal was to bring down the stock price. Even Stan must know that. “You don’t want this deal, do you?” he said.

  “I told you, Mike, I don’t know too much about it.”

  “Listen, Stan, we had to give them Europe. Hell, it just … it makes sense, Stan. They’re in Britain. They get to run Europe. You get to run everything else. What’s wrong with that?”

  “Nothing’s wrong with that.”

  “Talk to me, Stan.”

  Murdoch shrugged. “That’s what you’re saying, so that’s how it is.”

  “Let’s see what we can do.”

  “What can we do? This is what you’ve agreed to, right?”

  “Jesus Christ, Stan! It’s not like we’re talking about prize assets. They’re crap. You’ve been busting your butt for years to get them up.”

  “I have got them up! Give me more time, and I’ll get them up even better.”

  “Stan, come on. Get real.”

  “What about the numbers we posted yesterday, Mike? Weren’t they real? Where did they come from?”

  Wilson narrowed his eyes. Was that a threat? Or was it possible that Stan really didn’t know?

  Was it possible, thought Wilson, that Stan didn’t know what kind of contracts Louisiana Light had signed in order to get hold of plants in places like Hungary and Poland, how little flexibility they had in setting prices, no matter what happened to the cost of oil and coal? Was it possible he didn’t realize how much they had borrowed in order to pay for them, or that no matter how well Stan pushed up performance in those plants, it had been clear for a long time now that it was never going to be enough to service the debt? Much less provide the kind of earnings growth the market had come to expect from Louisiana Light and which Lyall Gelb, until now, had managed to make the market believe they were delivering.

  Maybe, thought Wilson. Maybe it was possible. Stan was an operations guy. A straight-down-the-line operations guy. Focused on efficiency, effectiveness, output. He didn’t know anything about finance. Maybe he really did think it was his plants, and the improvements he had managed to eke out of them, that had delivered Louisiana Light’s growth trajectory.

  “I’m going to ask you straight,” said Wilson at last. He pointed at the article on the coffee table between them. “Did you leak that, Stan?”

  Stan Murdoch stared at him. For so long that Wilson began to feel uncomfortable.

  “Did you talk to that newspaper? Did you give them the information in that article?”

  “Are you telling me it’s true?”

  “I’m not saying it’s true,” retorted Wilson quickly. “But I want to know whether you said it.”

  Stan whistled softly. “You sure do want this deal, don’t you?”

  “Just tell me, yes or no.”

  “You sure are hot for it.”

  “Yes or no?” demanded Wilson.

  “No.”

  “Good.” Wilson shook his head. “Why couldn’t you just say that?”

  “Because I don’t know how you could ask me,” replied Murdoch, and he gazed directly into Wilson’s eyes.

  Wilson looked away.

  The phone rang. Wilson got up. It was Stella.

  “I’ve got Dave Bracks on the line from Merrill Lynch,” she said.

  Wilson rolled his eyes. Dave Bracks must have seen the article. Now he was calling to find out what was going on with Dyson Whitney. Bankers! Like they owned you.

  “Tell him I’m busy. I’ll call.”

  “Yes, Mr. Wilson.”

  “And hold everything.”

  “Yes, Mr. Wilson.”

  Wilson put the phone down. He stood for a moment, thinking.

  Everyone was getting what they wanted out of this deal—or thought they were getting what they wanted—except Stan. Ed Leary thought he was going to be chairman of a $23 billion company. Andrew Bassett thought he was going to be the CEO in two years, with a knighthood. So did Lyall Gelb, without the knighthood. The BritEnergy director of operations thought he was going to get all of Europe. Only Stan Murdoch thought he was losing.

  But in a deal, everyone has to be a winner. Everyone who matters. A single person who feels aggrieved, if he’s senior enough, is capable of spiking the whole thing. If there was one lesson Wilson had learned at InterNorth, that was it. And right now, Stan Murdoch didn’t think he was a winner.

  Did Stan have the power to spike the deal? How much did he know about what Lyall Gelb had been up to?

  Nothing, probably. He was an operations man, not a finance guy. He took no interest in that stuff. But as an executive director, he had seen certain documents, occasionally he had even been required to sign things. One had to assume, thought Wilson, that if he put his mind to it, he knew enough.

&n
bsp; Wilson went back to his seat.

  “Okay, Stan,” he said. “Let’s see what we can do here. The European assets … I just don’t think that’s negotiable. The Brits are in the EU. Hell, Hungary, Poland—half those countries are in the EU as well. Makes sense from every angle for the Brits to manage it.”

  Stan didn’t say anything.

  “Come on, Stan. I didn’t mean that before. I know you wouldn’t leak some ugly lie like that. I just had to ask, you know. I’ve got a responsibility. I’m asking everyone.”

  “I wouldn’t leak anything,” muttered Stan. “How many plants have we bought? Have I ever leaked anything?”

  “I’m sorry, Stan. I had to ask. I’ve said it, I’m sorry, all right?” Wilson paused. “Come on, Stan. What can we do?”

  Stan shook his head. “We could have discussed this thing.”

  “Is that it? I’m sorry. Maybe I should have. It’s just … the secrecy and all. Maybe I got a little carried away. Besides, I know you, Stan. I know the kind of guy you are. You’ll do whatever’s best for the company. You never put yourself first.” Wilson paused, trying to gauge what effect this appeal had.

  “You’ve got me reporting to this Andrew Fassett,” said Murdoch.

  “Bassett. Is that a problem?”

  “He’s some English guy.”

  “English guys are good,” said Wilson.

  Murdoch grimaced.

  “Stan, come on. That’s only on paper. Hell, you’ll always have an open line to me. You know that.”

  “Funny. When I came here, I knew exactly what the deal was. I’m your head of operations. I report direct to you. Who is this Fassett guy?”

  “Do you want to meet him? Would that help?”

  Murdoch smiled sardonically.

  “Stan,” said Wilson, “do you want to leave?”

  Murdoch didn’t reply. Wilson tried to read his face. Maybe that was what he wanted. Maybe that was what all this was about.

  “If you can’t live with this, and you want out, I respect that.” Suddenly, Wilson thought he could see how to make Stan Murdoch a winner as well. “Stan, how much is your severance package?”

  Murdoch shrugged.

  Wilson tried to remember. Stan’s salary was around four hundred thousand; bonuses and options would double that. The severance was probably … a million, maybe.

  If he never worked again, how much would he need? How much would be a lot for a guy like Stan? Not much, probably. He wasn’t extravagant. As far as Wilson knew, he and his wife lived a pretty quiet life. They had a place in Baton Rouge, a second house somewhere near Lafayette, he seemed to remember, where Stan went fishing. That was their only indulgence.

  “I’ll triple it,” said Wilson. “I can’t put it in writing right now, you understand, but you have my word. You know me. If I say it, I’ll do it.”

  Murdoch watched him.

  “Is that enough? I figure, you know, we’ll need a consultant as well. Someone who knows the business.” Wilson was pretty sure he was on the right track now. “Huh, Stan? Maybe a few days a month. I figure someone like that would be worth another two, three hundred a year.”

  Murdoch nodded. “You sure do want this deal, don’t you?”

  “Times are changing, Stan.”

  “We’ve done pretty good up till now.”

  “Times are changing. We’ll get left behind. Come on, Stan. You were never a big-picture guy. Leave the strategy to me. You’re an operator. You’re a great operator. Let’s be clear. I don’t want to lose you.”

  “But you’re prepared to?”

  “I want you to do what’s right for you and Annie. If you want to kick back, put your feet up, that’s fine. Hell, how old are you Stan? Sixty-one? Sixty-two, right? You deserve it.”

  “You’d be happy if I did that?”

  “No, but if that’s what you want … Stan, the company’s bigger than any one person. You know that. It’s bigger than me, it’s bigger than you, it’s bigger than anyone.”

  “Yeah, only some guys know how to use it better than others, don’t they?”

  Wilson didn’t say anything to that. He gazed at Stan, trying to work out what he meant. Murdoch knew him better than anyone else at Louisiana Light, better than anyone in Baton Rouge. He knew him from the InterNorth days. Back then, Mike Wilson hadn’t been so circumspect in the way he handled his personal life. A lot of executives at InterNorth gambled hard, but none harder than him.

  “Company jet,” said Stan. “Takes you wherever you want to go. Whenever you feel the need.”

  There was silence.

  Then Wilson laughed. “Yeah, the travel’s a killer, isn’t it?”

  Murdoch stood up.

  Wilson stood up as well. “We got a deal? If you want to leave. It’s up to you, I’m not asking you to. But if you do want to leave, you happy with that? What I said to you?”

  “I’d say it’s very generous. I don’t know that I deserve such a generous offer.”

  Wilson laughed. “You deserve every cent.” He put out his hand. “So we’ve got a deal?”

  “If I want to leave?”

  Wilson nodded.

  Stan shook his hand. “Okay, Mike,” he said, and he turned to go.

  “You going back to your production meeting?”

  Stan looked back at him and nodded.

  “How often do you have that?”

  “Once a month.”

  “We do this deal and you want to go, that means you’ve only got two, three more of those to sit through.”

  Murdoch gazed at him for a moment. “I guess that’s right.”

  Wilson smiled. “How does that make you feel, huh? Probably feels pretty good.”

  Murdoch opened his mouth to say something, then thought better of it. “I’ll see you later, Mike,” he said, and left the office.

  Wilson watched him go. Everyone was a winner, he thought. Even Stan.

  Now he was going to get this mess with the Herald sorted out.

  18

  He was in fighting mood. The initial shock had gone and left him itching to hit back. Wilson glanced at the time. Almost ten. Eleven o’clock in New York.

  He picked up the phone to Lyall Gelb. Gelb had been taking calls from analysts all morning.

  “What are you telling them?” asked Wilson.

  “What do you think? It’s baseless.”

  “Okay. Get in here. We need to figure out what the fuck to do about this.”

  As he spoke, Wilson was looking at Bloomberg on his computer screen. The stock price was 44.40, almost six dollars down from its close after the quarterly results were reported. He picked up the phone to Stella while he waited for Gelb. Calls had been coming in for him from all over. Bankers, lawyers, anyone who knew anything about the deal, and a bunch of people who didn’t. He told Stella to cancel his meetings for the morning. While he was speaking to her, a call came through from Amanda Bellinger in New York. Wilson took it. Bellinger had been trying to find out more about the source for the article.

  “Tell me,” said Wilson

  “The guy who edits the financial page at the Herald is called Marv Koller.”

  “Never heard of him.”

  “I should hope not,” said Amanda. “Horrible man. Worst kind of lizard.”

  “You’ve had something to do with him?” asked Wilson.

  “Once or twice. Anyway, I’ve spoken to him this morning.”

  “Who gave him the story?”

  “He won’t reveal his source, naturally. Said he’d be happy to give you right of reply. Wants to interview you.”

  “When?” demanded Wilson.

  “Mike, don’t be ridiculous! That’s exactly what he wants. He’s got nothing and the fact that he wants to interview you proves it. The only thing he can hope for is that you come out and say something that gives the story legs. Otherwise, it’s going to wither on the vine. We just need to sit tight and let it wither.”

  “You don’t think we should threaten to sue h
im?”

  “Mike, for heaven’s sake! Oh my God! Mike, don’t even think about that.”

  “We should sue the motherfucking lizard!”

  “You’re not going to sue him,” said Bellinger.

  “Won’t it look like we’ve got something to hide if we don’t hit back hard?”

  “No, that’s exactly what’ll make you look like you have got something to hide. No one takes the Herald seriously. You take them seriously only if there’s something serious to be taken.”

  “What if we send some kind of a letter demanding a retraction? Maybe we send it to some other paper as well so they publish it.”

  “You won’t need to send it to anyone else, Mike. Marv Koller will publish it for you.”

  “Good!”

  “And then he won’t retract. And what are you going to do then?”

  Wilson was silent.

  “Mike, you’re angry. I understand. But trust me, the way to handle this is to deal with it like it’s beneath contempt. Here’s the line we take. We’re above this kind of garbage. We’re not going to dignify it by a response. Yesterday, we put out a great set of results. Judge us by our actions, not by innuendo. Mike, how does that sound?”

  Wilson thought about it. It sounded kind of meek. His instinct was to hit back, not turn the other cheek. “You really think that’s the best thing?” he asked doubtfully.

  “It’s the only thing, Mike.” Amanda said it with utter conviction. “It’s the only way to handle this kind of stuff.”

  “I shouldn’t talk to him?”

  “Mike!”

  “Okay. Look, talk to Jackie Rubin in our press office. My secretary says she’s been bugging me for a press release.”

  “No! No press release.”

  “So talk to her, will you?”

  “Of course. That’s what I’m here for. Mike, leave everything to me. I’ll call Jackie up right now. You don’t do this through a press release, you do it quietly. I’ll talk to the key people on the Street myself. But quietly, Mike, understand? Subtly. Understated. I’ll tell them I’ve talked to Koller, he’s got nothing, the best he can do is ask to interview you. They’ll recognize it for what it is, a fishing expedition. No one takes the Herald seriously. If you overreact, that’s when they’ll start sniffing around.”