But recession came. Gissings’ markets trembled and collapsed. The money from the loan went to meet the company’s losses. Worse still, the prime contractor on the construction work went bust with the job half done and Gissings’ advance payments in his pocket. Redesign of the product range was halted. Costs were trimmed when they should have been slashed. The £400,000 loan ballooned into £550,000, with arrears of interest. Penalty interest was now being charged and the dangerous snowball gathered momentum at a compound rate.
Meanwhile, old man Gissing had lost his will to fight. He spent his time sorting through the company archives and threw his remaining energies into setting up a ‘museum’ to lure visitors to the factory shop.
The bank had been tolerant, but its patience was at an end. Three weeks ago the bank had called in its loan. Gissings had thirty days to find the cash. If it failed, the official receiver - a cross between a bailiff and an undertaker - would step in. He would auction the company for whatever he could get, and if he thought the company would fetch nothing, he’d close it down and sell the assets piece by piece. Either way, Tom Gissing wouldn’t end up with a brass farthing.
The thought terrified the old man. Losing the company to someone else would be hard, but watching the firm die would probably kill him. That was why he had called in the accountants. The accountants had come in, drawn up a report, and stuck an ad in the ‘Businesses for Sale’ page of the Financial Times. That was where George had found the name, and where he’d obtained the report which had encouraged him to make the visit. But whatever rosy words the accountants used, the company was in a desperate plight.
It was now eight days before the deadline and the evening was drawing on. George had read everything, examined everything. He had seen all he wanted and still had no idea whether this walking dead company could ever live again. On the other hand, there were some simple facts he hadn’t lost sight of. He had no money, so buying anything at all would be a triumph of sorts. Also, he had traipsed across Britain for two months in search of a company he could buy for next to nothing. So far he’d found nothing at all. The good companies were totally unaffordable. The bad ones much worse than hopeless. And Gissings, for all its faults, had one major advantage: it still sold one and a half million quids’ worth of furniture each year. That meant there was something to work with.
The old man came back into the room. In the deserted factory buildings only George, the old man and his secretary were left. In the course of the day Tom Gissing had floated away from reality altogether. At times he seemed to think he was selling his company for a small fortune. At other times he treated George like a business partner and spoke of how they would develop the business together. Sometimes it was as though George were a historian, there to record the proudest moments of the company’s glorious past. It was pathetic. George wanted out.
Gissing dumped another load of papers on to the table.
‘I expect you’ll be wanting to see these next. Some of our very earliest brochures. See this? The Thunderer! What a name for a desk, eh? Very daring at the time, I can tell you.’
George interrupted rudely.
‘I’ve come to buy your company.’ The old man sank into a chair.
‘Yes. Yes, of course. Quite right.’
‘Have you had any other offers?’ The old man shook his head. ‘No.’
‘It’s not worth much right now, is it? Not with half a million quid of debt. Not when you haven’t made a profit for six years.’
‘No, well, I suppose you’re right. Still you never know. Things look a bit rough, but we’ve never lost hope.’
‘Yeah, well, whatever,’ said George. ‘I want to make an offer for the lot. Factory, designs, inventory. The lot.’
The old man licked his lips, which had gone suddenly dry. ‘How much?’ he croaked, his voice barely audible. The question threw George. He’d only just made up his mind to make an offer, and it hadn’t occurred to him to think of a price. He shoved his hands into his pockets for inspiration.
‘I’ll give you a pound,’ he said, tossing a coin on to the table. It spun for a moment then fell over. ‘If you give me the company, I can recapitalise it and make it live. If you don’t, the company and all your hard work will die. The bank will kill it. You know it will.’
George hadn’t intended to be cruel, but he was feeling awkward, and awkwardness made him tactless. He wondered whether he should say something, an apology maybe or something to try and buck the old man up, but he was held fast in the room’s gathering silence. For an infinite moment, the old man stared down at the golden disc. His rheumy blue eyes filled suddenly with tears. His lips opened and closed without sound. Finally his hand, shaking violently, closed over the glittering coin.
‘Good luck,’ he said. ‘Take care of things. You will take care, won’t you?’ The old man began to shuffle from the room. The pound coin was clenched so tightly in his hand that George feared he would cut himself. Then at the door he turned and added, ‘Oh, the name. It’s yours to do as you please with now, but I’ve always liked the name. Gissings Furniture. It’s got a ring to it. Anyway, best of luck.’
His footsteps moved hesitantly away down the dark corridor which then fell silent.
The old man’s secretary had watched the whole scene.
Her eyes blazed with contempt.
‘Delighted to have you on board, sir,’ she spat.
She held George’s eyes a moment, then she too turned and walked away, her face angry and complex, her deep eyes invisible. Minutes passed, and George was left, the only person in the whole factory.
His factory. His headache. His problem. His key to a million pounds.
3
McAllister’s ten days were up, but he was busy. Matthew watched his office like a hawk. McAllister was either in meetings or on the phone all day. Anxiety continued to chew at Matthew’s stomach. Get off the phone. Give me the answer.
Eventually, at four o’clock, McAllister caught Matthew’s glance and signalled him over. Matthew hurried across and was about to take his seat when McAllister asked him to close the door. That door was never closed. It was never closed, except, if rumour was true, when McAllister fired people. Matthew shut the door and sat down awkwardly.
‘I’ve three things to say to you, Matt. First, you did a fine job on that piece of work the other day. Too many traders, not just in this bank but everywhere, think that their market feel is so good that they don’t need to understand the facts. That’s bullshit. Every good trader has market feel, but a fine trader is a salesman, an economist and a diplomat as well. I think you understand that and I like it.
‘Secondly, we are going to give you a job here. You can finish your present assignment and then we’ll send you off to New York for the training programme. If you flunk that, or if your teachers there think you need to complete your degree, then we’ll chuck you out and that’s that. But I don’t see why you should fail. I think you will make a good trader.
‘The third thing is this. My good friend, Bob Landau, who runs the trading floor at Coburg’s, tells me that your brother is expected to do well in the corporate finance department there. They’ve never heard of you, and it’s pretty clear that you don’t know much about them. There are rules which matter a lot in banks and they matter most of all on the trading floor. At some point most traders break them. They don’t record a trade when they should do. They exceed a position limit. They tell a lie or conceal the truth from a client. I regret that this game is what it is. But I know that paying young men what we pay them and motivating them as we motivate them will encourage mistakes. What I tell traders in this firm is this: you can make one mistake and usually we will forgive it. But if you make two, it suggests you’re not capable of learning from your errors and we don’t want you here.
‘You, Matthew, have used up your mistake.’
4
Home late after a party. The music had been excellent, the drink OK, the men crap. Josie tittered to herself, releasi
ng a belch into the gentle autumn night, not walking quite straight as she turned into the street for home.
But beneath her giggles and her party dress, she was sad. Her best friends had been planning their skiing holiday and chatting about their fast approaching university life. Josie hadn’t the money to go skiing and she wasn’t going to university. She’d joined in, but sadly. Before the party broke up in a familiar scurry for taxis, mobile phones and sports cars, Josie had left, needing to catch the last tube.
She was annoyed with her mum. She knew, as Zack had said, that their mother’s plight was in part self inflicted. But what was she to do? Ignore her? Leave her without an income? Tell her to get on her bike, get a job, get on with life? Roll up her increasing depression and put it out with the garbage? Her seventeen-year-old self wanted life now, skiing now, A levels, university, career, everything. She wanted the life she’d been promised and was angry at whatever stood in its way.
She unlocked the front door. In the living room, a light was on. Helen Gradley sat in the armchair, head slumped, a needle of saliva hanging from her mouth. Her hands were blue.
‘Mum? Mum! Jesus Christ.’ Josie leaped to the phone, dialling 999. ‘Ambulance, please.’ She reached for her mother’s mouth. There was no flow of breath that she could feel. ‘It’s my mum. Please come quickly. I think she’s dead.’
5
Buying a company is no different from buying a used car. You can go for a test drive, you can lift the bonnet, you can haggle on price. But once you’ve handed over your money and driven away, there’s no comeback. When the car overheats, when the big end blows, when the hydraulic system escapes the engine in a cloud of steam, it’s tough.
Some people are experts. They can spot a repainted panel from twenty yards and a dodgy dealer from twenty miles. They don’t need help. They can do the whole job - inspect the car, negotiate a price, agree the deal - by themselves. Lucky them. But most people aren’t like that. We either call in experts to inspect the car - the AA, the RAC or whoever - or we get used to clouds of steam, expensive call-outs, and handing money over to people who burst out laughing as soon as we’ve left the forecourt.
It’s the same with companies. If you want to buy a company, then, before you scribble out your cheque, you’ll lift the bonnet and have a damn good look. And, unless you’re very smart or very foolish, you’ll want to have an expert with you when you do. What’s more, if you’re about to write a cheque for a hundred million pounds, or a billion, or more, you probably won’t mind writing a little tiny one - not more than one percent of the purchase price - to the expert who looks after you so well. The experts in company takeovers are called corporate financiers, and if the good ones aren’t always happy you can be sure it’s not for want of money. One percent of a billion is ten million pounds.
Right now, two corporate financiers from Coburg’s had the bonnet up and yawned with tedium.
The room they sat in was twenty foot by fifteen.
One side was wall-to-wall windows with a view out over the sweeping roofs of Liverpool Street station. One wall held the door and a low side-table for coffees and suchlike. The other two walls were covered in pale beech shelving stacked with eighty-eight lever-arch files. A further six files lay open on the table in the middle. Each file was thick with documents. The index to the files was fifty-five pages long, plus a three-page ‘Guide to Additional Material’.
Zack rubbed his eyes.
‘Jesus Christ. Is it always as dull as this?’
The two men from Tominto Oil had gone off for lunch, so Zack and Sarah could speak freely. It was weird working together. She was engaged to be married, he was as attracted to her as ever. They weren’t even friends, really, just colleagues. Perhaps they had never been friends, just lovers who argued. So now they kept themselves to themselves, talked about work, tried to be polite, to ignore the electricity which filled the air.
‘We’ve got ninety-four files to cover. That’s not so bad. I once saw a data room with three hundred and seventy files, for a deal that lasted a year and a half then never happened. That was bad.’
Sarah spoke dismissively. She felt uncomfortable. Putting the two of them in the same project team was like mixing air and petrol and hoping there wouldn’t be a spark. But Piers St George Hanbury, the project leader, didn’t know their history, and Sarah did her best to muffle the possibility of any real contact, let alone a spark.
They were part of a Coburg’s team helping a Texan oil company, Tominto Oil, buy a Scottish one. The Scottish one, Aberdeen Drilling, was being auctioned off by its parent company, which was currently talking to four serious bidders, including Tominto. Zack and Sarah and the two men from Tominto Oil were in the Aberdeen Drilling data room: the room which held every important document to do with the company. This was the Aberdeen Drilling engine, and the bonnet was up. Each bidder was allowed one week to look. They were allowed to read everything, take as many notes as they wanted, but they were allowed to copy nothing.
At the end of the week the bonnet would be brought down again and Tominto and Coburg’s would need to go away, discuss what they’d seen, and work out a price they’d be prepared to offer. If their bid was the highest of the four submitted, they’d sign a contract, buy the company, and drive it off into a happy, and hopefully breakdown-free, future. If their bid was one of the three lowest, the seller would shake his head, say so sorry, and leave them to watch all their work go swirling down the plughole. The Tominto people would go back to running their company and the Coburg’s corporate financiers would go chasing the next deal.
And what if the data room wasn’t complete? What if, amongst the myriad documents-management accounts, tax filings, statutory accounts, environmental reports, supply contracts, customer analyses, and a thousand other things - what if one or two nasty surprises were carefully left out, so that the poor old buyers didn’t have a clue? Well, it’s like the better end of the car trade. When you buy a company, you sign a contract which gives you a limited warranty. The warranty protects against any nasty surprises which you haven’t been told about. If something should have been in the data room and wasn’t, and it ends up costing you money, then you can go to the seller and demand a refund.
So sellers have a different strategy. Sellers put everything into the data room. Everything. They fill it as full as they possibly can. If they have time bombs, they bury them. They bury them under a mountain of detail so dull, that Buddha himself would kick the walls and scream. Every time Zack and Sarah were tempted to skip a page, they were stopped sharply by the thought that as they flicked forward they might miss it. The time bomb. The thing they were in the data room to find.
There were the two guys from Tominto Oil as well, but they weren’t the experts. In its forty-year life, Tominto Oil had purchased only about five companies worth more than a few million dollars. Coburg’s closed more deals than that every two or three months. The guys from Tominto are like you looking under the bonnet.
‘The thingamajig looks dirty,’ you say. ‘Is that doodah meant to have that bend in it?’ Stand back, sucker. Get out of the light and let the experts look.
Zack and Sarah went back to their files. Sarah was tapping notes into a portable computer. Zack had a laptop too but he wasn’t using it, he was using something more powerful: his memory. Since early boyhood, Zack had developed a pretty much photographic memory. He could look at a page, take it in, then just move on, knowing that he could bring it back to mind as clearly as if he had it in front of him. They weren’t allowed to copy stuff, but Zack didn’t need to. He was photographing it.
The silence settled again: Sarah tapping keys, both of them turning pages, looking for trouble, feeling strange in each other’s presence. Page, after page, after page.
6
Terminal 4 at Heathrow is the most exciting of them all. Long-haul destinations flick up on departure screens like locations in a Bond movie. African chiefs in full tribal regalia rub shoulders and crash trolleys with
neat Japanese businessmen. Arabs travelling with enough baggage to fill a jeep mix with students holding a single battered rucksack and a passport crammed with visas. This is a true melting pot, the world in chaos. It is exhilarating.
But amidst the confusion, a silent but complete apartheid rules. Economy travellers to the left. Business travellers to the right. And to the very far right, in their own quiet corner, first class and Concorde passengers are massaged gently through the inconvenience of having to walk to the plane at all. In that land of whispers, the rich, the famous and the powerful disappear down their own gangways, flattered, pampered and attended every step of the way.
Matthew was standing in the economy queue, and he wasn’t enjoying it.
In the days when his father had paid for his airline tickets, Matthew had usually travelled business class, even first class if he could stand the inevitable argument. Today, with an economy ticket, Matthew gazed at the long queue stretching ahead of him and looked again at his watch. It was now only fifty minutes to take-off and the queue seemed to be stuck. Only the rear view of a particularly attractive French girl kept him from losing his temper altogether. She was casually dressed in jeans and a crisp white cotton shirt, but the designer look was unmistakable and her figure was a pleasure to behold. She pushed a single large suitcase and carried a soft white leather bag on her shoulder. Matthew wanted to see her face but was half afraid that if she turned her head she would disappoint him. Right now, she looked perfect.
Just then the queue which had been stuck broke into a confusion at the far end by the check-in desk. The neat line of people dissolved into a serum. Like everybody else, Matthew pushed forward to see what was happening.
The plane due to leave for New York at six that evening had developed some mechanical failure. They had found a replacement, but the replacement was a smaller 767, instead of the scheduled jumbo. The remaining passengers would not be able to travel that night. All passengers would be given a choice of accommodation at a nearby airport hotel or cash to allow them to travel home. All passengers would be able to travel out first thing the next day on a plane arranged especially for them. British Airways apologised profusely for any inconvenience caused. Passengers should contact the ground staff if they required help.
The Money Makers Page 7
