Takeover

by Brian Freemantle

  “You mustn’t forget that,” warned Prince Hassain. He headed another branch of the family but was separated by a tribal marriage and no direct threat; traditionally the Hassain family had backed the Faysels.

  “I’m not talking about family feuds,” said Faysel. “I’m talking business.”

  “You might not be, but the Crown Prince will,” said Hassain. He gestured and red tea was poured for both of them. Hassain and Faysel wore the white robes of Mecca pilgrims. They had both been educated in the West and spoke English to protect themselves among Hassain’s staff.

  “That’s ridiculous.”

  “But understandable. And what’s happened makes unarguable political sense.”

  “What about business sense?”

  “That’s debatable, I agree,” said Hassain. “But for the moment one outweighs the other.”

  “Two years is a long time to allow uncertainty with business partners,” said Faysal.

  “I’ve checked the accountants’ figures,” said Hassain, like Faysel a graduate of the Harvard Business School. “That’s the minimum length of time for the sort of cut-backs being imposed upon us.”

  Faysel rose from the floor cushions upon which he had been squatting, Arab-style. “I still think I should see Faoud.”

  “It won’t do any good.”

  “I should still see him.”

  The protocol of Arab rule is strictly governed, with even the lowliest beggar having the unquestioned right of audience with the king, so there had been no necessity for Faysel to arrange an appointment with the Crown Prince. He did so anyway, wondering as he entered Faoud’s audience chamber whether the automatic Western courtesy had been a mistake; he knew one of the many resentments was the amount of time he spent out of the country. The greetings were effusive, with much hand-holding and cheek-kissing: they were very close in status. Unlike the earlier encounter with Hassain, the discussion was automatically in Arabic.

  “My father will be pleased you are well and back among us,” said Faoud. Prayer beads moved slowly through his fingers.

  “Regrettably only briefly,” said Faysel.

  “My father appreciates your dedication to the business success of our country,” said Faoud.

  Faysel had forgotten how the other man always avoided responsibility, even in the most inconsequential conversation. Faoud wasn’t going to find it easy to follow.

  “The political decision about increasing oil supplies is going to cause difficulties,” said Faysel. Aware of Faoud’s antipathy towards him, Faysel decided he had expressed that badly: he was conscious of a flare of satisfaction in Faoud’s hooded eyes.

  “You dispute the political wisdom?” said Faoud, equally badly.

  “Of course not,” said Faysel at once. “It was a response which had to be made and its diplomatic success is unquestionable. It is because of that success that I sought this audience today: I think we should consider extremely carefully the effect upon our investment programme.”

  Faoud frowned. “What is the connection?” he said.

  “The West sees us as a country behaving responsibly, curbing the more extremist of our brothers,” said Faysel. “It would be a tragedy if we were to lose that goodwill by restricting our investments too much.”

  “Economies have to be made.”

  “I’m aware of that,” said Faysel. “My concern is to see that they are properly made.”

  “Maintained in the most influential countries and cut back in those which have little influence, you mean?”

  “Yes,” said Faysel. “That’s precisely what I mean.”

  “The most influential countries are the richest,” said Faoud.

  “We are not debating moral right or wrong,” said Faysel. “We’re discussing political reality.”

  “The Council is well aware of political reality,” said Faoud.

  Not if you are guiding the discussion, thought Faysel. He said, “I’m gratified to hear that assurance.” Hassain had been right; he was wasting his time.

  Faoud shifted on his cushion, an indication that the audience was ending. “Continue your good work in the West,” said the Crown Prince.

  Was the man jealous? wondered Faysel. Until his father’s accession to the throne, Faoud had maintained homes in Paris and New York and enjoyed the gambling tables and society life. “I will,” he said.

  “I’m sorry if your work is made more difficult by what has happened,” said Faoud.

  The man lied well, thought Faysel.

  9

  Rudd intended meeting Prince Faysel before the official session but there was a hold-up refuelling the Lear jet in the Azores, and then headwinds for the remainder of the journey, delaying him further. There were messages from the Prince when Rudd arrived at the Baur au Lac, but when he tried to return the calls Faysel was unavailable. By the time he reached the first-floor chamber overlooking the Höttingerstrasse the Arabs were already assembled, as was the practice, in an ante-chamber, so the opportunity was lost.

  The meetings were rigidly formalized. As a concession to the Westerners who held minority placings, the Saudi investment board alternated its meetings between Jeddah and Europe, but arranged the sessions so that the major decisions were always taken when the venue was the Middle East, with the king and his immediate court available. Even the seating was regimented, the Saudis emphasizing their control at a separate, half-moon table, with the remainder of the board assembled at a facing table behind their named markers. Rudd’s immediate neighbour was the chairman of the American Federal Reserve Bank, Alwynne Hinkley. Next to him were the chairman and vice-chairman of the Swiss Banking Corporation. The deputy governor of the Bank of England was at the end of the table. There were headsets for translation, but the discussion language was English so no one needed them.

  Prince Hassain was in the chair, a bearded, wary-eyed man whom Rudd knew was regarded as a moderate within the court. Prince Faysel sat four places away from him; any indication of their closer friendship would have been improper so there was no obvious greeting between them.

  “I am grateful for your attendance,” began Hassain, with customary Arab politeness. “Today’s session, although not one at which any decisions will be reached, is regarded by my country as important.”

  Pens and paper were arranged before the delegates, but no one attempted notes, knowing that a simultaneous translation would be ready before they left.

  “My country is being badly affected by Western inflation,” resumed Hassain. “An inflation which we recognize is to a large extent caused by the uncertainty or upward price movements in oil. For that reason we are making an effort for stability, lasting, sensible, proper stability.”

  Rudd had received from the Best Rest intelligence division an analysis of the jump in oil supplies, because it affected their hotels as well as their airline, and he was aware of the speculation in the Wall Street Journal and The New York Times. Faysel regarded him impassively.

  “We have consciously increased production,” said Hassain. “Coupled with the effect of Western cut-backs, because of price and conservation policies, there is now a world surplus in oil, with refineries and tankers full and unable to make discharge. It has had the market effect of reducing the spot prices in Rotterdam from a high of $52 a barrel to something around $36. We want to see it go even lower, to a stabilized pricing of something like $30 or $28. It is that reduction for which we are going to argue at the next meeting of the oil exporting countries to be held in Vienna.”

  The man stopped, sipping some water. Taking advantage of the pause, the Federal Reserve bank official said, “This will surely be opposed by countries like Nigeria and Libya and Algeria?”

  “But supported, I hope, by the majority,” said Hassain. “There is no purpose in our being paid for our products in currency which is worthless: that has for a long time been our argument and at last it is being accepted.”

  “Could I ask, sir, of the effect upon this fund?”

  Hassai
n nodded. “Which is the purpose of this session,” he agreed. “Sometimes it is necessary to amputate a limb to save a body. We are not even considering amputation but severe surgery. The money available for investment through this fund and through the channels opened to us by you, our fellow board members, is being curtailed: in places, even stopped altogether. Before the oil glut policy was determined upon, it had been envisaged that this year there would be available for worldwide commitment something like $72,000,000,000, as the beginning of a five-year investment plan. This will now not be the case.”

  “How much will be available?” asked the Englishman at the end of the table.

  “That has still to be decided and will be debated among us in Jeddah, in four months’ time,” said Hassain. “An estimate of $75,000,000 could be too high.”

  “This could have an effect upon the money markets,” said the Englishman. “Certainly in London, and I would imagine in New York as well.”

  The Federal Reserve Bank chairman nodded agreement.

  “In increased interest rates for alternative investors,” agreed Hassain. “Which should delight the monetarists. We are fully conscious of the short-term difficulties that could arise but consider it necessary, for the reasons that have already been explained. Everyone – even the producers – think the wells pump money, not oil. It’s an attitude that has to be corrected.”

  “Can we agree a commitment of investment in principle, without consultation?” asked the Swiss Bank official.

  “No,” refused Hassain at once. “From now on, there’s no commitment without specific approval from Riyadh.”

  Rudd looked down at his unmarked jotting pad. So he wasn’t going to get the $30,000,000 for the Texas development. Thank God they were as financially secure as they were. There was an ironic benefit: cheaper oil would mean that the ships he was considering buying would be even more economical to run. He hoped the announcement wouldn’t panic the American board. The reassurance was immediate. Maybe once, he thought. But not any more.

  “This is going to have a severe effect upon confidence,” said Hinkley. Conscious of possible offence, he added hurriedly, “I don’t mean in Saudi Arabia. I mean in money markets throughout the world.”

  “Which is why it is essential that what we are doing is properly explained, so that the publicity is not sensationalized,” said Hassain. “This is not a crisis. It is an attempt at rationalization.”

  “It could be recognized as a game of bluff,” warned the Swiss chairman. “Speculators might gamble that you can’t continue high production indefinitely.”

  “They might gamble.” agreed Hassain. “And if they did they would be badly hurt. The most essential part of the strategy upon which we have decided is that there is no time limit upon it. If a speculator wants to buy an oil tanker or a refinery tank of oil and sit and wait for it to rise in price, then he’s going to have to be a very rich man to sustain the interest on his money while he waits.”

  Rudd moved into the discussion. “We are talking about future investment,” he said. “What about that which already exists? Is there any question of it being withdrawn?”

  Hassain hesitated. “Subject to the most stringent examination,” he said. “We want a saving of $150,000,000.”

  “With respect, sir, that’s an ambivalent answer,” said Hinkley. “And if it were given any publicity the inference could be very damaging.”

  Hassain nodded at the correction. “This discussion and any announcement that is likely to be made refers specifically to future commitment,” he emphasized.

  Rudd hoped the assurance was sustained. Best Rest were administering something like $50,000,000 of Saudi money virtually on the basis of an interest-free loan. He decided there was no point in attempting to discuss the details of the hotel development to which he had intended devoting their expected investment. Rudd looked along the table. The same thoughts appeared to be occurring to the rest of the Westerners.

  “There would seem little purpose in advancing new proposals today?” said Hinkley, to be absolutely sure.

  “They could be submitted for committee consideration,” said Hassain.

  The bankers hurried documents and prospectuses from their briefcases. Rudd added his outline to the rest, with little hope of it being accepted. The bankers would have development projects for third world countries, the sort of investment that was publicly attractive.

  Normally the conferences lasted an entire day, but because no one had to talk about their schemes it finished before midday. Rudd lingered in the ante-room, waiting for Faysel.

  “I’m sorry,” said the Arab immediately. “I tried to get hold of you, to explain.”

  “The plane was delayed,” said the American.

  “I’m sorry, Harry. I know you went ahead with this Texas idea on my promise of investment.”

  “It’s no big problem,” dismissed Rudd.

  “I gave my word,” said Faysel.

  “You weren’t to know,” said Rudd. “Texas still makes sense.”

  “Let’s hope London does,” said the Arab.

  With their own aircraft available, they decided to fly directly to London and bring forward their meeting with Buckland. From the airport Rudd telephoned Hallett, already in London, to make arrangements for his arrival and telex New York about the decision of the investment board. From an adjoining booth Faysel called Buckland.

  On the way to the plane Faysel said, “Buckland says he’s looking forward to the meeting.”

  “So am I,” said Rudd. Already Zürich was committed to memory. Now he was concentrating upon the meeting in England.

  Buckland had been anticipating Snaith’s approach but had not known that he would bring Smallwood with him. The two dissident directors sat opposite the imposing desk in the woodlined office and Buckland thought back to his reflections on his way to the Cambridge house. He felt secure here as well, he decided: perhaps even more so than in the country. Snaith didn’t appear impressed by his surroundings, but Buckland suspected that Smallwood was. Before this business was over, they’d both have reason to be impressed.

  “We thought sufficient time had passed,” said Snaith.

  “Having heard them, I think all the proposals that Haffaford have made are extremely sound,” supported Smallwood.

  “I still haven’t reached a decision,” said Buckland.

  “Isn’t it one for the board, as a whole?” said Smallwood.

  The fat little bugger was very sure of himself now, thought Buckland. “I’ll present it to them when I consider it opportune,” he said, consciously stressing the condescension.

  “There isn’t really an alternative, is there?” said the finance director.

  “Isn’t there?” said Buckland. He was glad the meeting with the American had been brought forward.

  The London telex went first to the deputy chairman, so it was Patrick Walker who brought the news of the Saudi cut-back to Morrison: both men had office suites overlooking Wall Street and from Morrison’s it was possible to see the tufted outline of Battery Park. Morrison remained head-bent over the message after he had read it; there was no cause for satisfaction but that was the feeling he had.

  He looked up at last and said, “So the site purchase money comes from reserves?”

  “Still a wise enough investment, when it’s re-zoned,” said Walker.

  “What’s the timing for that?” asked Morrison.

  “Ten days,” said Walker. “The ninth, according to Jeplow.”

  10

  Walter Hallett had been in the lead car from the airport and was already in the reception area, completing the registration arrangements. Rudd remained just inside the door of the Berridge, gazing around and letting the memories flood back. There must have been redecoration, he supposed, but the colour seemed the same, the pale green wash on the walls pointing up the gold ormolu in the cornices and doorways. The carpet hadn’t changed, either; still the rich ruby red. He stubbed his toe into it. Thick wool, not li
ke the heavy-duty nylon he insisted upon for all their installations and for which he had established three factories in Des Moines. The reception and registration desk, still inadequately small, was to the left, with a separate desk for the cashiers, again inadequate in size. The small cocktail bar was to the right and between the bar and the reception desk, unseen behind the pale green door, was the telephone switchboard. Twenty lines, he remembered: when he’d worked here he’d volunteered for night duty and always offered to stand in for the operator when he went for supper, so that he could sneak calls to Angela in Boston without having them charged to his account.

  There were five people behind the reception desk which was too cramped to accommodate them, and there was a queue at the cashiers’ grille. Apart from the head porter there appeared to be at least eighteen attendants lingering in the foyer, in addition to the uniformed staff of four responding to instructions from the doorman. Rudd went to the entrance of the cocktail bar and counted five waiters and two barmen.

  “You want a drink?”

  Rudd turned at Hallett’s surprised question. “Of course not,” he said.

  “There’s a registration form to sign; they’re sending it up to the suite.”

  Four porters were assembled to carry their bags; two could have managed, with a trolley, thought Rudd. The baggage man went into a separate lift. He and Hallett were taken to the fifteenth floor by a reception clerk in black jacket and striped trousers, who used the journeys to explain the amenities of the hotel. After showing them into their rooms he offered them a personalized card, with his name, in case he could help further. Rudd thought the young man was impressive. He wondered if people had thought the same about him when he’d performed the task.

  “The Park Suite,” identified Rudd, when the man had gone. “Ten years ago it was £15 a night, with £1 for breakfast. Now it’s £250 a day and breakfast is £10 if it’s continental and £18 for full English.”