“What’s the stock selling for now?” Reuben asked. “Thirty?”
“Around that, thirty or thirty-one. It was thirty at the close yesterday.”
“That’s not much of a premium,” Reuben said.
“I’ll say. And it’s not going to get him AFC. There’s no way that can happen.”
“So you’ll fight him?”
“Absolutely. And we need to start right away. You’ve got all kinds of hired guns at Chase & Ward, don’t you? At least that’s what I read in the papers. I want the biggest goddam gunner you’ve got and I want him tomorrow morning.”
“That would be Marvin Yates. He knows every in and out of this modern takeover business—unlike old-fashioned types like Ernest Crowder and me.”
“Get him up here. I’ll send one of the planes for him.”
“I’ll try to get hold of him,” Frost said. “What about Ernest? Shouldn’t he be here too? After all, he knows more about the legal side of your business than anybody.”
“Of course. See what you can do, Reuben.”
After twenty-five minutes of telephoning, Frost reached the two Chase & Ward partners, who reluctantly agreed to take one of the AFC planes Sunday morning. That accomplished, Flemming and Reuben sought out Randolph Hedley to tell him the news. The three decided that there was no need to disturb everyone else’s Saturday night and that Flemming could break the news at the next morning’s family meeting.
As they went back to join the main group, now reassembled in the hotel bar, Frost turned to Flemming. “You know, these mergers-and-acquisitions types have jargon for everything—even, Marvin Yates tells me, for the little overture you just got.”
“Well, what is it?” the Chairman asked.
“It’s especially appropriate up here in the Adirondacks,” Frost said, chuckling.
“Okay, okay, Reuben, what’s the term?”
“Flemming, you just got a great big bear hug.”
SUNDAY MEETING: I
3
The annual Andersen family business meeting took place at eleven o’clock Sunday morning. It was a small assembly, held in a sunny parlor in the main building of the Mohawk Inn. Flemming Andersen presided, as was customary, and his studied, calm demeanor did nothing to hint at the startling turn of events of the night before.
He began the proceedings by calling on Sorella Perkins to talk about the Andersen Foundation. She read a short, businesslike report which informed her audience that the Foundation had made grants of $15 million during the most recent year. In accordance with the Foundation’s traditional practice, most of the funds expended had gone for nutrition research and for programs to feed the hungry and homeless.
Her prepared report completed, Sorella, rather hesitantly, asked for questions. Her sister Diana put up her hand at once.
“Sorella, I’d like to know what the Foundation is doing to address the concerns of women,” she asked. “I know there are all those nutrition projects you mentioned, but those don’t really deal with the issues troubling women today.”
Diana then launched into a speech about women’s problems at work; the pay differential between the sexes; the lack of day-care facilities and other problems of the single parent; sexual harassment in the workplace, and on and on down the Concerned Women’s agenda.
It was clear that Sorella did not know how to stop her sister’s tirade, which was not really an attack on the Andersen Foundation as much as it was a litany of every contemporary female grievance. Sounding a bit like a talking Statistical Abstract of the United States, Diana reeled off figure after figure to show the injustices being done to women by American capitalist enterprise.
Her listeners became edgy as she went on without showing any signs of letting up. Finally Casper Robbins, the consummate diplomat, came to Sorella’s deliverance.
“Diana, obviously you raise some very important issues here. They are issues that I know interest the Company—my Lord, if the women of this country aren’t prosperous, there’s very little hope for our business—and I’m sure the Foundation is interested in them, too. Wouldn’t you agree, Sorella?”
“Absolutely. The only problem is, the Foundation can’t solve all the problems of this country, or even of the women of this country. I think we’re better off doing things rather intensively in one area—nutrition and hunger. We’ve gotten pretty comfortable with those subjects and I think we know how to make a real impact.”
“I disagree with that,” Diana said emphatically. “We all know the Federal government won’t do anything to help women—it’s all we can do to keep them from making things worse. So it’s up to foundations like ours to provide solutions, to make services available, to …”
“Diana, the Foundation is always willing to listen to new ideas,” Sorella said quietly. A moment before she had spoken with authority, even eloquence, about the Foundation’s work; now, challenging her sister, she appeared much less sure of herself. “If you have any concrete proposals, why don’t we sit down and talk about them?”
“You’re on, sister, you’re on,” Diana replied. “And while I’m at it, Mr. Robbins, I’d like to find out a little more than I know now about the situation of women at AFC.”
She started repeating her tirade once more, but Rob-bins again interrupted.
“As I said a few minutes ago, Diana, AFC must be attentive to women’s issues. Any other course would be downright foolish. I think we’re doing a good job at AFC. What we can do, and what we are doing, is making sure that the women who work at AFC are treated fairly. I think we’ve achieved that. Margaret Holmes, who used to be one of our directors—and not exactly a shrinking violet when it comes to feminist issues—thought so, too …”
“Margaret Holmes! Are you kidding?” Diana interrupted. “She’s the Uncle Tom of the women’s movement! Always saying the correct thing, but always agreeing that management is right. She was just using you as a stepping-stone anyway, going on to bigger and more glamorous boards just as soon as she could. Try again, Mr. Robbins!”
Diana Andersen’s tone was more suited to a political meeting of the most confrontational sort. But Robbins refused to be baited.
“I grant you, Diana, no one ever said Margaret Holmes was Mother Teresa …”
“Mother Teresa! Don’t mention her to me! With her stand against abortion!” Diana sputtered.
“Fine. Leave Mother Teresa and Margaret Holmes out of it,” Robbins shot back. “But the reality is that Andersen Foods has a darn good record with respect to women. If you come over to the office in New York some day, I’ll show you the facts and figures that prove it. And I’ll even buy you lunch. Is that a deal?”
The group laughed, and some applauded. Diana, realizing she was temporarily beaten, did not continue her questioning.
Before Diana could reconsider, Flemming Andersen said that it would next be in order to hear reports about AFC. Following a ritual pattern, he cautioned his listeners at the outset that much of what they would be hearing about the Company was “inside” information not then available to the public. They would be expected to keep it confidential, he said, and could not trade in AFC common stock without seeking the advice of Chase & Ward, as AFC’s counsel.
The “inside” information the group heard from Joe Faxton, the AFC Treasurer, was pleasant indeed. Earnings of the Company for the fiscal year then in progress were projected to be up over the prior year by as much as twelve percent, and the long-term outlook seemed very strong.
Making the right obsequies, Faxton attributed the strong projected increases to record sales of SUPERBOWL soup, HEART O’ GOLD pet food and Max beer.
Robbins, who spoke next, noted the favorably low commodity prices that were benefiting AFC (except for butterfat prices, which had put pressure on ice cream profits), prices that were expected to remain low because of the bountiful harvests that were projected around the world. He reiterated Faxton’s cheerful predictions and expressly mentioned the role of Flemming Andersen in conceiving th
e soup and pet-food lines, and of Billy O’Neal in developing the beer business.
“If this is what having a family-owned company means, then there are plenty of corporations that could use a little more family,” Robbins said, to applause from the group.
“I certainly appreciate the nice things Joe and Casper had to say about SUPERBOWL, HEART O’ GOLD—and Max,” Flemming Andersen replied, as he got up to speak. “But with all due modesty, there are some other things that ought to be mentioned.
“First and foremost is our name. ‘Andersen’ means something to the American consumer. It stands for quality, and people are very much aware that it stands for quality. Now I know some people—perhaps even some in this room—have said that quality is too expensive, that we should be less insistent on using only the finest ingredients in our products, that we should take shortcuts by using more taste-enhancers and preservatives.
“In my considered opinion, that view is shortsighted. The way it is now, our reputation for quality makes introducing a new product much easier—because of our reputation, people will have confidence in it. Now maybe that wouldn’t work if we started selling pizzas or chop suey, but it’s certainly been true with SUPERBOWL.
“And look what it does to advertising costs. We spend about four percent of sales on advertising. Some of our competitors spend double that. The public knows the Andersen name—we don’t have to build a reputation. And the advertising we do can focus on the new Andersen products, not the old established ones.
“But you’ve heard my quality speech before,” the Chairman concluded. “So let’s go on to any questions you might have for any of us.”
Diana Andersen again put up her hand. “With all these profits, when is the dividend going to be raised?” she asked.
“I’ll try to answer that, my dear,” her father said, from his armchair. “The Company now pays ninety cents a share—roughly one-third of profits. Absent any great demands for cash, which I don’t now foresee, I’d expect there would be a modest increase sometime in the next twelve months, possibly to a dollar. But I don’t see going above the one-third line. We have to make capital expenditures on our plants and we must spend unsparingly on research and development. All this takes money, and it means we can’t be paying out all our earnings to the stockholders.”
“But other companies manage to pay out more,” Diana pressed.
“Of course they do. Eat, drink and be merry, for tomorrow you may die. And that’s exactly what companies that fail to reinvest may do. Die. Die a slow death trying to operate without any innovations. Besides, Diana, I don’t quite see what your concern is. At a dollar a share, you’ll collect annual dividends of about two point four million. That really ought to be enough to live on, my dear. Unless, of course, you’ve sold off some more of your stock.”
Flemming Andersen’s veiled reference was to the fact that Diana had sold a portion of her AFC holdings. She had originally held the roughly 3.2 million shares her father had given her. But citing the needs of Concerned Women and her other causes, she had sold 800,000 shares in the public market over time, freeing up (after taxes) some $15 million for her good works.
Diana’s parents had been furious at her disloyalty; it was a firm, if unspoken, Andersen rule that family-owned shares were not to be sold. Laurance and Sorella, unlike their parents, probably would have been tolerant of Diana’s sales, except for her high-minded exhortations to them about being too rich and about not caring for the poor and unfortunate (Diana making her own moral superiority in this regard quite clear). As a result, her brother and sister were as displeased with her as Flemming and Sally, and they now quite enjoyed their father’s dig.
“Thank you, Father, for your help,” Diana said sarcastically. “I think that even little impractical me could have figured out my dividend income—multiply the number of my shares by one dollar, right?—but thanks for doing it for me.”
When Flemming Andersen again rose from his chair, his audience assumed that this signaled the end of the proceedings. But instead, he began speaking, his countenance no longer placid but stern and angry.
“After all the good news you’ve heard this morning, I’m afraid I have some bad news. Or at least disturbing news,” he began. Several of his listeners looked at each other, puzzled.
“Last night I received a call from Jeffrey Gruen. Now you all know who he is—the raider, the financial Dracula who takes over corporations and sucks out their lifeblood. Gruen told me that he’s bought eight percent of AFC’s common stock and he wants to buy the rest.
“The man is a blackmailer, in addition to everything else. If the Company Board of Directors approves a deal with him, he says he will propose forty dollars a share. But if he has to make a hostile tender, the price will be thirty-eight.
“Mr. Gruen asked to meet with me tomorrow morning. I’m going to do that. But I’m also going to tell him that there is no way that he is ever going to take control of AFC, because this family will never sell to him, no matter what his tender price.
“I assume that I have the concurrence of all of you in this—that AFC should oppose Gruen by every honorable means at its disposal. Is there any dissent from that proposition?”
The room was silent and no hands went up. Flemming looked directly at his daughter Diana and his nephew Billy O’Neal—the most likely potential defectors, in his judgment—but they sat impassively.
“Very well. Our esteemed counsel, Reuben Frost, tells me that we have been given what is known in the mergers-and-acquisitions trade as a bear hug. Well, ladies and gentlemen, I can tell you here and now that if it is legally possible to do so, we will extricate ourselves from that hug, whether we tickle the bear under the armpits or do something dirtier and more drastic.”
“Who’s going to this meeting tomorrow?” Billy O’Neal asked, from the back of the room.
“Whoever wants to,” Flemming replied. “If you want to come, that’s fine. You or Laurance or anybody else.”
“I do,” O’Neal said.
“I do, too,” Laurance Andersen added.
“All right. I might also tell you that two of Chase & Ward’s lawyers are coming up here this morning and will fly back with us this afternoon. Reuben, let’s go find out if they’re here yet. I’ll see the rest of you at lunch.”
The family meeting was over. Flemming quietly circulated in the group and approached those he wanted to go back to New York with him on the first flight leaving after lunch. There would be a second flight soon after, so the others would not have to wait long, though Flemming’s arrangements would separate husbands and wives (including Reuben and Cynthia).
“Reuben, what do we do about the Board?” Andersen asked, when he had found Frost in the crowd and after asking him to come back on the first flight. “Shouldn’t we be setting up a special meeting?”
“Yes, you should,” Frost answered. “As soon as you can.”
“I’m sure everyone’s scattered to the four winds today. So I guess it’ll have to be tomorrow. Gruen wants to see me early, if possible. So do you think the Board can wait till afterward?”
“That depends on what you’re going to say to him.”
“I’m going to tell him to go straight to hell.”
“That’s what I suspected, from what you just said inside. But I don’t think you ought to do that without the Board behind you. If they agree to tell him to go to hell, that’s fine, but I don’t think you should do it on your own, no matter how strongly you feel as an individual.”
A look of impatience appeared on Andersen’s face, then as quickly went away. He knew the rules, knew that he was not the sole owner of AFC, but he did not especially like to be reminded of this actuality. He was sure in both heart and mind that he would only act in AFC’s best interest and did not need the Board of Directors—or his lawyer—to tell him how to go about it. But this was no time to be autocratic.
“What are you saying, that I should be noncommittal?” Andersen asked.
“Yes. And if that’s your approach, the Board meeting can certainly wait until afterward.”
“I’m going to try and call them all now. And I’ll tell Gruen we’ll see him at nine o’clock. Okay with you?”
Frost thought briefly of asking whether Andersen really wanted a superannuated retired lawyer to accompany him. But he thought better of it. After all his years dealing with AFC affairs, why shouldn’t he go along? Besides, he had to admit to himself that it might be interesting.
“Fine. While you’re calling, I’ll see if Yates and Crowder have arrived.”
Buy Murders & Acquisitions Now!
About the Author
Haughton Murphy is the pseudonym of former lawyer James H. Duffy, author of the Reuben Frost Mysteries. A graduate of Princeton University and Harvard Law School, Duffy got his start writing as a part-time and summer reporter for the Daily Times of Watertown, New York, before moving to New York City to practice law. After a number of years as an attorney, Duffy began writing thrillers, eventually retiring to focus on his novels full-time.
All rights reserved, including without limitation the right to reproduce this ebook or any portion thereof in any form or by any means, whether electronic or mechanical, now known or hereinafter invented, without the express written permission of the publisher.
This is a work of fiction. Names, characters, places, events, and incidents either are the product of the author’s imagination or are used fictitiously. Any resemblance to actual persons, living or dead, businesses, companies, events, or locales is entirely coincidental.
Copyright © 1987 by Haughton Murphy
Cover design by Greg Mortimer
ISBN 978-1-5040-2815-8
This edition published in 2016 by Open Road Integrated Media, Inc.
345 Hudson Street
New York, NY 10014
www.openroadmedia.com
THE REUBEN FROST MYSTERIES
FROM MYSTERIOUSPRESS.COM
AND OPEN ROAD MEDIA
Murder Takes a Partner Page 27
