When the formalities were finished, Buckland said, “Any business arising?”
At once Snaith said, “I think we all know that there is.”
The man would have rehearsed the presentation, Buckland guessed: probably practised in front of the mirror to make sure he’d got the facial expression right. “Perhaps you’d like to take us through it?” he said to the banker. Christ he was enjoying himself!
Snaith cleared his throat. “The board will remember the decision from the previous meeting to approach the bank of which I am a director, with a request for an increase in the Buckland House overdraft facility. Subsequent to that decision there was a meeting between Haffaford and Co., the chairman and vice-chairman.…” The banker stopped, looking up at the people around the table. Definitely rehearsed, decided Buckland.
“Haffaford are unwilling to grant that request,” Snaith declared. There was no reaction from Penhardy and Buckland guessed he’d been warned in advance during the whispered conversation with Lord Condway. Gore-Pelham stopped smiling.
“Why ever not?” said Gore-Pelham.
“An intensive examination was made of the company and its performance, and a forecast reached of its expected profitability for a three-year span. The conclusion was that an additional £10,000,000 would be an over-extension of its resources.”
“An over-extension of Buckland House resources!” said Penhardy. “That’s ludicrous.”
“Not in the opinion of our analysts,” said Snaith stubbornly.
“The opinion must be wrong,” said Gore-Pelham.
“It’s the opinion upon which we are basing our decision,” said Snaith.
Gore-Pelham snapped his fingers. “You just can’t cut us off, like that.”
“Haffaford are prepared to mark up your account for a further £3,000,000,” said Snaith. “For that facility we would expect a complete management restructure, to introduce cost control throughout every division of the group. And there would need to be a three-monthly audit to ensure that the economies were on target.”
“Damned usury,” said Condway.
“No,” said Snaith. “We see these as practical business proposals to bring this company back upon course.”
“I’m already involved in negotiations to do just that,” said Buckland. He purposely spoke quietly, intending the maximum effect, and for a moment he feared Snaith had not heard him.
Then the man turned fully towards him and said, “What?”
Buckland spoke without notes, knowing it would increase the impression of control. “Following what I considered to be a completely unsatisfactory meeting with our merchant bankers, I decided to explore alternative proposals to resolve these temporary difficulties. The largest loss-making section of our company is the liner fleet. Within the coming weeks, I have every confidence that I shall be able to negotiate its sale. The effect will be twofold: a financial drain will be stopped and the revenue from the sale will remove the existing overdraft and any need for the cap-in-hand demands that are being imposed upon us.” Buckland stopped, swallowing. He hadn’t intended the last part; the anger had come suddenly at his realization of the humiliation that Haffaford had attempted.
Snaith was staring along the table, tight-faced at the awareness of how he and his bank had been outmanoeuvred. “With whom are these discussions taking place?” he demanded.
“They are at the moment at the most preliminary stage,” said Buckland. “If any rumour were to arise within the City, then I think they might be jeopardized.”
“Are you doubting the integrity of your fellow directors!” demanded Snaith.
“No,” said Buckland. “Appealing to their common sense. I seek a mandate from today’s meeting to continue these discussions to the point when I can convene another meeting and put them formally before you, for a decision.”
“This is monstrous!” protested Smallwood. “No board of a public company can give a chairman carte blanche like that.”
“Let me repeat something I said earlier,” asked Buckland. “If these negotiations are successful, then the Buckland House difficulties are solved overnight.”
“How can you make a claim like that,” demanded Smallwood. “We must be given details.”
“None exist at the moment,” said Buckland. “I’ve already undertaken to lay them before you the moment they’re formulated.”
“I’ve sufficient confidence in our chairman to propose that he be asked to continue these discussions,” said Penhardy.
“Seconded,” said Condway.
“Amendments?” invited Buckland.
Snaith spoke looking down at his carefully prepared and now useless files. “I want the record of this meeting to register my strongest protest at the conduct of the chairman and of directors who imagine that the management of a company can be conducted in this way.”
“And mine,” supported Smallwood.
Buckland glanced towards the secretariat table. “Notes are being taken,” he said. There was a lightness to the remark which he hadn’t intended.
“We’re a director short,” said Snaith. “A vote cannot be taken.”
“Prince Faysel’s proxy is vested with the chairman’s discretion,” said Buckland. He offered the written authorization across the table to the other man.
“My amendment is that the vote be deferred until Prince Faysel can attend and decide in person,” said Snaith.
“Seconded,” supported Smallwood.
“Amendment to the vote,” said Buckland, sure of the outcome. Snaith and Smallwood raised their hands.
“Against?” said the Chairman, raising his hand as he spoke. Condway, Gore-Pelham and Penhardy followed.
“Original motion?” said Buckland. The voting division was the same, but reversed.
“Thank you for that expression of confidence,” said Buckland, to his friends. “I repeat the earlier assurance to convene a meeting at the earliest opportunity when I have something positive to place before this board for a decision.”
Snaith hurriedly gathered his papers, nodded curtly to the men around the table and walked jerkily from the room. Smallwood followed.
“Well done, Ian,” said Condway. “That was as complete a counter-attack as I’ve seen in a long time. Bloody well done.”
Buckland smiled gratefully at the praise. His father would have been proud of him today, he thought; it was an unusual reflection and Buckland confronted it. He didn’t think there had been many occasions when his father would have been proud.
He wished there had.
They had to leave the car in Fleet Street and walk down the narrow, Dickensian lanes into the Inn of Court where the appointment had been arranged with the Queen’s Counsel. As well as Rudd and Bunch there was Percival Berriman, the English solicitor, a plump puffing man. Berriman stopped outside the chambers and pointed to the list of occupants. Sir Henry Dray’s name was the first.
“Head of chambers,” said Berriman, as if the recommendation were necessary.
The corridors inside were as labyrinthine as the approach roads but Dray’s office was a surprise, a bright, airy room, neat and well polished. The textbooks were behind sparkling glass and Dray’s desk was large, a wide area for papers and documents. The barrister rose, coming forward to meet them. Berriman went through the introductions and Rudd decided the solicitor was given to self-importance. The barrister offered them sherry, but both the Americans declined. Neither Dray nor Berriman bothered.
“I will prepare a written opinion, of course,” said Dray. “But I understood from Mr Berriman that there was some urgency, which is why I suggested this meeting.”
Dray was a thin, almost skeletal man, bony-faced and bonyfingered. He kept his hands in front of him on the desk, constantly fingering a gold pencil. He spoke looking slightly beyond them, as if he were addressing a court: his voice was measured and flat.
“I need advice to enable me to decide whether or not to continue with negotiations,” said Rudd.
�
�What sort of negotiations?”
Rudd hesitated. The man would have to know everything, if the legal opinion were to be of any use. “At the moment, merely for the purchase of the liner fleet belonging to Buckland House.”
Dray lowered his eyes and looked directly at the American. “What eventually?”
“A complete takeover,” said Rudd.
Dray examined his worry-bead pencil. “Negotiations for the fleet are amicable?” he said.
“Yes.”
“But the takeover wouldn’t be.” This time it wasn’t a question. Dray smiled. The expression made his face look even more skull-like. “At the moment, Mr Rudd, under the scheme of arrangement under which Buckland House is constructed, you don’t stand a chance.”
“That was our impression,” said Bunch. “Which is why we want to know if the scheme of arrangement is challengeable.”
Dray indicated a red-bound law book by his right hand. “There are stated cases,” he said. “It depends upon what grounds you base your challenge.”
“Surely it must be against the shareholders’ interests?” said Rudd.
“Not if the shareholders are getting a proper return for their investment.”
“What if they’re not?”
Dray nodded. “Then we’re getting somewhere,” he said. “If we can prove misuse or mismanagement, then we could formulate a request to the High Court Registrar. Do you have such evidence?”
“I think it might be available,” said Rudd.
“How many Buckland House shares have you acquired?”
“None yet,” said Rudd.
The lawyer frowned. “For someone without any holding, you seem remarkably confident,” he said.
“I intend to negotiate a share exchange when I acquire the liner fleet,” said Rudd.
“Will that be acceptable to the Buckland House board?”
“If it isn’t then I don’t want their fleet,” said Rudd simply.
“Do you imagine your bargaining position sufficiently strong?”
“I won’t know that until I begin negotiations.”
Dray sat back in his chair, interlocking his ugly fingers. “If you can provide provable evidence of irregularities that could be shown contrary to public interest, then you would have cause for challenge,” he said. “Without it, the family holding could completely baulk you, no matter how strong your other shareholder support was.”
“I understand,” said Rudd.
“Shareholders’ fights are usually messy,” warned Dray. “This one would be particularly so.”
“Are you warning me against it?”
“I’m advising you to think carefully upon it, before you commit yourself.”
“I always do that, sir,” said Rudd.
“I’ll have my written opinion available within a week,” promised Dray.
“By which time I’ll have decided what to do,” said Rudd.
On the way back to the Berridge in the car, Bunch said, “Why didn’t you mention the gambling settlement; that’s precisely what he was talking about.”
“I just wanted general guidance at this stage,” said Rudd. “Let’s see if I can get a seat on the board first.”
Hallett was waiting in the suite when they entered, clipboard in hand. “Senator Jeplow has called three times from Washington. I’ve said we’ll get back to him,” announced his personal assistant.
“It’ll be the commission payments,” said Rudd.
“What do you want me to do?” asked the lawyer.
Rudd thought for several moments. “There’s nothing more you can do here,” he said. “I’ll come back as soon as I’ve had the meeting with Buckland. You go ahead of me, direct to Washington. Set up a meeting for the day after tomorrow.…” He thought again. “Better make it afternoon. I’ll hold a board meeting in New York in the morning.” He looked to Hallett. “Better fix that, by the way. Anything else?”
“Someone called Lady Vanessa Hartland has called you twice.”
Towards the end of Snaith’s account of the meeting, Richard Haffaford got up from his desk and went to the panoramic window with the view of the City of London and St Paul’s Cathedral. He remained there, silent for several moments, after the Buckland House director had finished. “No indication who he could be dealing with?” he asked at last.
“None.”
“What’s the shareholding of the funds we manage?”
“Nineteen per cent.”
“Nineteen per cent of clients’ money and our overdraft investment of £10,000,000 is too much to let this sort of thing go on,” said Haffaford.
“What can we do?” said Snaith. “Whatever I try to do on the board, I’m blocked.”
“Create a shareholders’ revolt,” said the merchant banker. “Have him removed from the chairmanship and get in more professional people: it’s like a damned London club at the moment.”
“That’s exactly what it’s like,” said Snaith, with feeling. “It’ll still be almost impossible, without boardroom help.”
“How committed do you think Gore-Pelham, Condway and Penhardy are?”
“Completely loyal,” judged Snaith.
Haffaford shook his head in doubt. “Condway and Penhardy are professional directors,” he reminded the other man. “They’ve got reputations and other directorships to worry about. If we allege mismanagement and they oppose us, later to be proved wrong, that makes them look pretty silly, doesn’t it?”
Snaith smiled at the cynical business logic. “What do you intend doing?”
Haffaford thought for a moment. “Perhaps give a discreet lunch at the Connaught,” he suggested.
14
The Buckland House liners were named after Scottish counties, with the Caithness being the 65,000-ton flagship. It was mounted in the most prominent and favoured position in the display around Buckland’s panelled office, followed by the Sutherland at 55,000 tons, then the Ross at 50,000. Three – the Nairn, Moray and Inverness – had been standardized at 45,000 and the last to be built, the Kincardine, had a deadweight tonnage of 40,000. Rudd knew the specifications and details of each but this was the first time he’d seen models and photographs. He walked slowly behind the English chairman, taking his time before each. He thought they looked very impressive: slightly old-fashioned, lacking the cut-away prow and raked funnels of the more modern Scandinavian cruise ships but all the more appealing because of it. Rudd saw the need for an immediate change, beyond whatever modifications had to be made internally. Black hulls were psychologically wrong in the permanent sunshine of Mexico and the West Indies; white was the colour, unless the designer came up with a more convincing argument. He decided that the names were good and that he would try to keep them.
The American turned away, purposely avoiding any interest in the other illustrations around the room of the worldwide hotel chain. The invitation came at once, as he had hoped it would. “And these are the hotels,” said Buckland.
Rudd set off again, wanting to remain before each one as long as he had in front of the ships but refusing himself the time. It was interesting to see how little any of them had changed externally, apart from the occasional ventilation shaft or airconditioning tunnel: in their day they must have been regarded as extremely modern. Although architecturally dated, they were still attractive, like the ships.
Buckland stopped before one photograph and said, “The Grand Crispi, in Rome.”
Rudd saw a large, typically square Italian palace-type building.
“We keep a personalized registration of every guest, throughout every one of the hotels,” said Buckland proudly. “The Queen of Sweden returned to the Crispi after eighteen months to find the biography of Wellington that she had been reading on a previous visit and forgotten to take with her on the bedside table where she had left it, still with the marker in place.…” Buckland turned fully to the smaller man. “That’s what makes Buckland House so special,” he said.
And so uneconomical, thought Rudd. To maintain
and update that sort of indexing system would need a small army of clerks. “That’s very impressive,” he said.
“It’s a story we often quote in our publicity,” said Buckland. “But it’s quite true.”
Buckland moved away from the photographs and Rudd followed, not towards the desk but to the far end of the room, to leather armchairs arranged around an open fireplace. There were fire irons in the grate and Rudd presumed it actually worked in the winter.
“I was glad to get your call,” said Buckland. This was the first time he had been solely responsible for opening any sort of negotiations and certainly of something this large: before, on smaller things like land purchases or property leasing, he’d always been his father’s assistant or the signatory after everything had been argued out and agreed between lawyers and accountants. Buckland felt tight with excitement. And nervous, too.
“I promised forty-eight hours,” said Rudd.
“What’s your decision?”
“It will have to be a decision of my board, in New York,” qualified Rudd. “But I want to continue the discussions.”
Buckland smiled, the relief palpably obvious. “I’m very pleased,” he said.
“Did your board approve?”
Buckland nodded. “I was authorized to negotiate, if you expressed interest.”
Rudd relaxed back against the leather, hands outstretched along each overstuffed arm. There was a ritual about negotiation, as formalized as any intricate dance routine: Rudd thought he knew every step and felt quite comfortable. “How much do you want?” he said.
Buckland blinked at the direct demand, off-balanced. “I was expecting you to make an offer,” he said.
The first mis-step, thought Rudd. “There will be variations, of course,” he said. “The Caithness is commercially more useful than, say, the Kincardine.”
“Of course,” said Buckland. He was relieved at having avoided committing himself.
“It might even be that it would make more commercial sense for me not to buy the entire fleet, but just part of it.”
Takeover Page 13
