Takeover

by Brian Freemantle

  “What do the English lawyers say?” he asked.

  “There’s a meeting tomorrow.”

  “I’d like to attend.”

  “Of course,” said Rudd.

  Morrison decided he’d manoeuvred himself well. There couldn’t be a move without his being aware of it, and by being aware of it he could thwart it. What did $2,250,000 matter? Avenging Angela was worth more than that; much more.

  23

  Sir Henry Dray worried the gold pencil between his fingers, like a man doing physiotherapy exercises after a hand injury. He listened to Rudd’s account of the extraordinary meeting with his head on one side, occasionally making a note in a large, ledger-type book. When Rudd finished he said, “Messy. Very, very messy.”

  “But to our advantage or not?” said Rudd.

  “Depends what you want that advantage to be.”

  “Acquisition of Buckland House,” said Rudd. “We’ve got a twelve per cent holding now. An uncertain board. And shareholders who are going to hear accusations of mismanagement and even deceit involving their chairman. The shares are already undervalued and they’re going to go lower. If we don’t make a bid, then someone else will.”

  “I agree,” said Dray.

  “Do you consider the share drop inevitable?” The president of Best Rest had sat as intently as the lawyer, listening to what Rudd said.

  Dray frowned towards Morrison. “Unquestionably so,” he said. “Hardly a situation that’s going to instil confidence, is it?”

  “Buckland’s account seemed reasonable enough at the meeting,” said Rudd.

  Dray stopped the pencil movement, ready to make more notes. “Do you believe him, about the house and the woman?”

  “No,” said Rudd. “Obviously he’s maintaining a mistress, but he’s covered himself well with the rental and the letters.” He felt hypocritical and swallowed heavily.

  “Acceptable enough for a boardroom or a shareholders’ meeting perhaps,” said Dray reflectively. “Not for a court of law. There the evidence is on oath and lying is perjury.”

  Rudd felt a sweep of uncertainty at what he was initiating.

  “There’s no other way?”

  Dray came up to him surprised. “Of course there’s no other way. We’ve already discussed that. Haffaford’s have made a mistake, limiting their criticism to the man and asking for a shareholders’ decision. The attack has got to be upon the share structure first and Buckland’s unfitness second. The two dovetail perfectly, but only in the right order.”

  Rudd wondered if the lawyer ever managed to get any emotion into his flat, expressionless voice. “What do you advise about the Haffaford move?”

  “Do nothing,” said Dray at once. “Let them do all the work and we’ll sit back and pick up the pieces. They’ve obviously employed some firm of private enquiry agents. Why should we duplicate the expense?” He tapped the pencil against some point in the ledger. “I’d like to have proof about that house,” he said. “The gambling debt is provable from the company documentation, and we can get sufficient inference from the advance payment of his dividend and fee apportionment. But the love nest is the pressure point.” He smiled across at Rudd. “No way of proving that he’s lying, is there?”

  Would Margaret have known? Rudd felt sick at the thought that came to him, annoyed that the consideration should ever enter his mind. It was ludicrous for him to have imagined he could keep the relationship with Margaret separate from what he hoped to achieve with Buckland House, but he wouldn’t – he couldn’t – use it to benefit. Soon he’d have to tell her. Just as he’d have to tell her other things. But when? He had to be sure of her first. If he misjudged it by a second, he’d lose her. And he was determined not to do that. He’d lose Buckland House and their investment and a good deal more rather than lose Margaret. He went back to the barrister’s remark. Rudd thought his own personal situation was a damned sight messier than Buckland’s.

  “Well?” encouraged Dray, head tilted at the American’s hesitation.

  “Not unless it comes from Haffaford’s attack,” said Rudd. “They’re employing the enquiry agents, like you said.”

  “Perhaps after all we should bring in our own people,” said Dray. “I know one or two excellent firms. They might do better than Haffaford’s.”

  This wasn’t business, thought Rudd. Sure, he normally attempted to get every advantage available before opening negotiations and sometimes the line between right and wrong got a little blurred, but it had never before been like this, never personal. If the criterion for running a business came down to morals, he wasn’t any better qualified than Buckland. Less so, if the two affairs were balanced side by side.

  “I don’t think we should,” he said positively. “Absolute secrecy is still essential. Haffaford’s people might stumble across our investigators and then there could only be one conclusion: leave it until after the shareholders’ meeting.”

  The barrister regarded him doubtfully. “Ultimately it’s your decision,” he said. “You know what you want to achieve.”

  “Is that really a good idea, relying on somebody else’s attack?” challenged Morrison. Although he had expected his investment to decrease in value by the manoeuvre he intended – even though he’d thought that first day in Boston he’d sacrifice it all to destroy Rudd – now that the moment was here the cautious contradiction gripped him. Morrison had always been terrified of poverty, of not having access to tangible money. That was why he ran such a surprisingly high cash account at his bank, instead of investing the money as most other businessmen would have done.

  “I’m not relying on it,” said Rudd. “I’m letting it take its course. You’ve heard from Sir Henry that Haffaford’s move is wrongly aimed. We’ll get the truth in a court.” Hypocrite, thought Rudd again: he was only postponing the thing, like a child desperate for excuses to avoid taking an unpleasant-tasting medicine.

  “There’s another possibility we haven’t discussed,” said Dray.

  “What’s that?” said Morrison apprehensively.

  “That somebody else does make a takeover move.”

  “They’d have to break the structure,” said Rudd.

  The barrister nodded. “Of course. And if they did, it would come down to a fight. Could even be more than one. What are you going to set your bid at?”

  “Ten per cent over par, with the expectation of being driven up to twenty-five per cent. All cash.”

  “How much?”

  “I estimate $200,000,000 worldwide.”

  “That would be cheap, if you could get it,” said Dray. “The problem is that you’re not going to have the opportunity to mount it quietly: if we go to court over the structure, then it will have to be declared. That’s the purpose of the action, after all.”

  “What’s the point you’re making?” said Morrison.

  “That you go to all the trouble and expense of breaking an archaic scheme of arrangement and someone can jump over your heads with a better offer and make what you’ve done a complete waste of time and money.”

  “Are you advising against it?” asked the old man.

  “Just setting out the difficulties that might arise, to enable you to make the proper decision,” said the barrister. “I see that as my function.”

  “Is that view in your written opinion?” asked Morrison.

  “Of course.”

  It would be a vital piece of information, for later presentation to the Best Rest board. He looked sideways to Rudd; it was like setting out across a high wire without a balancing pole, he thought. He said, “Shouldn’t we refer back to the board before committing ourselves?”

  Rudd shook his head. “The board have approved. The decision comes down to me.”

  Morrison felt a jump of satisfaction; that remark couldn’t have been better if it had been scripted.

  “I need that decision,” said Dray. “Irrespective of the shareholders’ meeting that Haffaford’s are bringing about, there will be a lot of prelimina
ry work to be done: claims to lay, court allocation to arrange, things like that.”

  The moment of commitment, Rudd recognized. Once started, it would be unstoppable. Was the hurt and the damage that he would be risking be worth it, in the hope of becoming the owner of the best? Of being the best?

  “Start the action,” he said.

  Margaret had a key so there was no need for his impatience, but Rudd was anxious to get away from the Berridge suite and back to the Grosvenor Square apartment before she arrived. He tried to curb the feeling, to drive it from his mind. Never – ever – before had anything personal come before work. Because until now there hadn’t been anything personal. And there still shouldn’t be now. She wouldn’t expect it and he shouldn’t allow it. There were still too many uncharted difficulties ahead to risk adding to the problems by carelessness.

  “How about the share composition?” he asked Bunch.

  The lawyer took the portfolio figures from his briefcase, setting them out on the conference table. Rudd moved irritably, wondering if the man were trying purposely to be slow.

  “There’s a mass of ‘A’ and ‘B’ ordinary,” he said, starting from the bottom. “There’s a special ‘A’ issue which carry small voting rights, but the others don’t. The Preferential issue divides with sixteen per cent held by the Buckland family as you already know, fifteen per cent between the professionals – funds, institutions and pensions, and in that I include Haffaford’s overall portfolio – our twelve per cent, thirty-one per cent in small holdings and twenty-five in shielded, nominee groupings.…” He coughed, turning a page of his file. “The Initial are mainly in the hands of the Buckland family, which again you know. That comes to thirty-five per cent. The big investors, funds and institutions again, have thirty per cent. Condway, Penhardy and Gore-Pelham hold five per cent each and there’s twenty per cent among small investor pockets.…”

  “Dray was right about the uncertainty,” said Rudd. “There’s going to be a slump, caused first by the shareholders’ meeting and then by the action. If we could get in as soon as possible after the outcome, we could get a price a lot lower than 102p a share. The professionals should come to us at once. And they’ll bring the small people, too; there’s always a sheep complex in a panic. And I think that’ll apply to Condway, Penhardy and Gore-Pelham.”

  “I thought you said they were loyal to Buckland.”

  “The story sounded good,” said Rudd. “It won’t, after the shit has been thrown.”

  “Should be all right then?”

  “What about the nominee holdings?”

  “No idea,” said the American lawyer. “That’s why they’re nominee. They don’t want anybody to know.”

  “Do your best to find out,” urged Rudd. “It’s a good breakdown but it’s incomplete unless we know it all.”

  “I’ll try,” said the lawyer. “It won’t be easy.”

  “Nothing seems to be easy about this deal.” said Rudd.

  Margaret overcooked the steaks because she wasn’t accustomed to cooking, but Rudd declared them excellent and hoped she believed him; he decided deceit was coming easily to him in everything. Neither wanted anything else, so they carried the remains of their wine into the larger room. She’d brought records, as well as tapes and some magazines and books: there were even some prints arranged against the most advantageous wall. She put a record on and said, “Do you like it? It’s Delius. My favourite.”

  “It’s beautiful,” said Rudd.

  She burrowed her way familiarly into his shoulder. He pulled her close to him, enjoying the feel of her body. He didn’t want to go to bed yet and knew she didn’t: they were getting another sort of intimacy by being together and exploring each other in a different way.

  “Ian told me,” she said suddenly.

  “Why?”

  “He needs me to support the story.”

  He wouldn’t have used it, even if he could. What was happening between them was sacrosanct: it had nothing to do with takeovers and share assaults and business coups.

  “What did he tell you?” asked Rudd cautiously.

  “Everything. About Fiona, the house. The lot.”

  “You know her then?”

  “Oh yes,” she said easily. “I have done for years. She’s a friend of mine.”

  “You don’t sound very upset.”

  “That’s what Ian said. I don’t know what he expected me to feel.”

  “Aren’t you worried about the embarrassment?”

  “I’m worried about his mother,” she said. “It’ll be awful for her.”

  “Are you going to say you knew?”

  “Of course I am,” said Margaret. “I’ve got to, haven’t I? It’s my duty.”

  He looked sideways, curious at her attitude, but said nothing.

  “And what those people did to Ian was dreadful: they treated him like some criminal.”

  Which technically Rudd supposed the man was. “Does his mother know?”

  “He’s telling her. Vanessa is coming down from Yorkshire to be at the meeting.”

  Rudd hesitated at the question and then decided it was justified. “What’s going to happen to Ian and you?” he said.

  “Happen?”

  “Are you going to stay together?”

  She twisted around and looked up at him. Her face was serious. “Don’t,” she said. “Please don’t.”

  “I’m sorry,” he said. Damn!

  “It’s still too new, Harry. Let’s leave it as it is.”

  “What’s that?” he said.

  “I don’t know yet.” It wasn’t a fantasy any more. But it wasn’t real either. She felt confused. And frightened.

  They had had to wait until Richard Haffaford returned from a bankers’ meeting in Basle and the flight from Switzerland was delayed. The building around them was deserted apart from cleaners, the majority of the rooms in darkness. The city is a place that sleeps early: hardly any sound came from the streets outside.

  Haffaford listened patiently to Snaith’s review, towards the end shaking his head in annoyance. When the Buckland director finished, the merchant bank chairman went first to Sir Herbert White and then Pryke. “Well?” he invited.

  “We didn’t do it right,” admitted White at once. “We hurried and took things on face value. Which was a mistake.”

  “That’s my view, too,” said Haffaford. He went back to Snaith. “That’s not a criticism,” he said. “I’m sorry we put you into that position.”

  “It’s no good weeping over the mistakes,” said Smallwood objectively. “What do we do now?”

  “I made it clear we were going to seek a shareholders’ declaration,” said Snaith.

  “We needn’t go through with it,” said White.

  “We can’t stay in this position,” said Haffaford. “There’s too much money committed.”

  “The explanations seemed satisfactory enough at the meeting,” warned Snaith.

  “That £635,000 was definitely criminal!” said Haffaford. “Condway has as good as admitted to me that he agreed to a cover-up.”

  “It’s not illegal any longer,” said Snaith. “It’s been endorsed by the full board.”

  “I still think we’ve got enough,” said Haffaford. “The board and that American are content to support Buckland, cap in hand. But the professionals won’t be. No fund manager is going to take those explanations and be satisfied.”

  “But will there be sufficient support for the vote?” said Pryke. “If we try and fail, then the only effect will be to depress the prices and that’ll mean our investors getting an even worse return for their money.”

  “It’s a risk,” accepted Haffaford. “But I think it’s one we have to take. But this time I don’t want us going off half-cocked. I want to know why it is necessary for Buckland to advance himself that money, ahead of the formal decision of the board. And I want to know all about the exchange of letters over the house. It’s a bloody lie, and we all know it. Let’s get enough mat
erial to prove it. Then we’ll see how loyal Buckland’s directors will remain.”

  “You still think Condway will switch?” said Pryke.

  “He and Penhardy,” said Haffaford. “He told me so, in as many words. If people start to run, Condway will be out in front, leading the way.”

  “What about the American? and Prince Faysel?”

  “I don’t know about the American,” said Haffaford. “But Faysel’s a professional, responsible for an investment fund like the other managers. He’ll move quickly enough to cover himself.”

  “Any point in trying to find out more about this man Rudd, to get an assessment of which way he’ll jump?” said White.

  Haffaford considered the suggestion. “We know enough already to recognize him as a professional, but in a way different from the others,” he said. “Let’s concentrate on Buckland for the moment.”

  “So we go ahead with the shareholders’ meeting?” said Snaith.

  Haffaford nodded. “And create a campaign leading up to it,” he said, “Lots of leaks to the financial journalists and commentators. And a printed circular to all shareholders. Be careful about it: we’d better write it on a committee basis and then get it thoroughly vetted by our lawyers. I don’t want us being slapped down with a libel writ.”

  “It isn’t going to be pleasant, is it?” said Pryke.

  “No,” agreed Haffaford. “But it’s necessary.”

  24

  Rudd considered the merchant bank’s attack in the boardroom to have been inept, so their preparation for the shareholders’ meeting surprised him. It began with media leaks, carefully timed to reach newspapers in the middle of the week and thus allow the speculation to grow and then increase towards the weekend for the Sunday newspapers, which were able to give greater coverage and attempt better explanations. It was in the Sunday newspapers that the link between Buckland House and Best Rest was established. And in the Sunday newspapers it was hinted that the argument did not only concern finance with its limited readership appeal but a sexual scandal. The effect was to take the interest beyond the financial pages and cause a continuous stream of interview requests, first from English and then American newspapers. Rudd rejected them all and then discovered reporters watching the hotels and trying to trace his movements. It was the discovery of this – and a test that proved they maintained a pursuit despite determined efforts to shake them off – that caused him to scrap a meeting with Margaret. She complained that her house, too, was under newspaper siege. The following day she postponed for the same reason.