“By now some ten thousand Americans have invested in my companies through the boiler rooms. They’ve bought about ten million shares for about forty million dollars.”
Sidney Isher said, “All of which goes into your pockets. But wait till the Internal Revenue boys get on you.”
“I’m hardly that careless, Sidney. All my operations are laundered through Swiss trusts with numbered accounts. Who’s going to trace them to me? As far as my admitted personal capitalization goes, I’m covered. I’ve set up a private charitable foundation. Made huge donations to it and then borrowed the assets of the foundation back, and defaulted on the loan, which leaves the foundation bankrupt and the Internal Revenue boys empty-handed.”
“It’s taken more than a year to lay all the groundwork. I’ve sunk every dime that wasn’t nailed down into NCI on margin and pyramided every time there’s been an uptick. The upshot is, as of this morning I’ve got voting title to something like two million shares of NCI, and I’m prepared to spend the better part of three hundred million dollars to get control.”
There was a suitable hush-in fairness, he had to call it a hush-and it pleased him.
Finally Isher, stone-faced, said, “You can’t do it. That amount won’t buy control.”
“What do you take me for, Sidney? I can add and subtract. It’ll buy me seats on NCI’s board.”
“You’re aiming for a proxy fight, then?”
“Not if it can be avoided.”
“Then I don’t get it.”
George Hackman said, “What about Judd? Does he take all this lying down?”
“Elliot Judd is out of it. He doesn’t own the company anymore, he’s turned his stock over to nonprofit trusts. At the next board meeting, he goes out. I mean to take his place.”
Isher said, “Who told you that about Judd?”
“Wyatt found it. A letter locked up in Howard Claiborne’s office. Judd’s an old man, he’s not well, and he’s getting out. His directors are big names with big reputations, but they’ve always been a rubber stamp for him. Without the force of Judd’s personality in the chair, they’ll buckle under pressure.”
“No,” Isher said. “Not that easy, Mace. I don’t mean to play Cassandra here, but suppose you’re the NCI board and a man with Mason Villiers’ reputation comes in and tries to shove his hand up your twat. Do you just sit back and let him do it? No. The minute those boys find out what you’re up to, the whole organization will close up tighter than a sparrow’s cunt. The word will get out, there’ll be a scramble, the price of NCI will start to sag on the market, and your factors will start making margin calls on you where you’ve pyramided. It’ll take four, five hundred million dollars to turn the trick then, and you haven’t got it.”
“I’ll have it when I need it.”
“I don’t see it.”
“Have I ever let you down, Sidney?”
Isher was cold. “You might. It’s too big, Mace, you can’t cut it-no man alive could cut it, this side of Howard Hughes.”
Villiers watched him darkly. The red-headed lawyer’s eye winked rapidly. “All right, Sidney. There’s something else in your craw. Get it done, or get off the pot.”
“All right, I will. I know you, Mace-nobody ever has a meeting with you, it always has to be a collision. You’re full of savage drives, you’re brilliant-hell, maybe you’re a genius-but your emotional insights belong to a ten-year-old, and your whole record testifies to that. Those boys on the NCI board know too much about you-they won’t even give you a chance to open your mouth. They’ll slam the door in your face.”
“Just because they don’t like my table manners?”
“You’d be surprised how much that counts. But more important, they don’t trust your morals or your methods. They’ll know what will happen to NCI if you get your hands on it. Everything you do is limited to the needs of personal aggrandizement and ambition. You’re not capable of even the most rudimentary concern toward the good of the company or its stockholders or its employees, let alone the society of which NCI is an influential part. Those boys have got too much responsibility to too many people to let you get your foot in the door. They’ll fight you right down to the last share of common stock. You’re up against a stone wall, Mace. You haven’t got the credentials, and you haven’t got the finesse, and you haven’t got the reputation to bring it off. They’ll fight you all the way.”
“Let them,” Villiers said. “That’s what makes the game worth playing, isn’t it?”
“There’s no point in playing this kind of game if you can’t win.”
“Sidney, not only can I win, I am going to win.”
“Nuts. You’re going to have to show me, and I won’t convince easy.”
“That’s exactly what I’m going to do,” Villiers told him. “Why do you think I’ve told you this much? I’ve told you more than you needed to know, and you’ve rewarded me with exactly the kind of reaction I expected. But I’m going to convince you, Sidney, because if I can convince you, then I can convince them. And because I need to have both of you as alert and anxious and dedicated to this operation as I am. I need your eyes and ears, your sensitivities. I can’t watch everybody and everything at once myself, and we’ve got to spot every sign of an opening. Now, I’m going to spell out the details for you, and you’re going to listen carefully and save your objections until I’m done. Understood?”
“Go ahead,” Isher said, flicking a resigned glance toward Hackman, who sat back wreathed in cigar smoke, squinting, drumming the fingers of his left hand on the leather arm of his chair. Villiers shifted his seat and studied their faces, until Isher, made uncomfortable by the enforced stillness, coughed on his catarrh and said again, “Go ahead, Mace.”
“There are about eighty million shares of NCI outstanding. At thirty-two dollars a share, that comes to roughly two and a half billion dollars. The company’s assets are worth more than that, of course, but the difference is made up in preferred stock and other capitalization. To get absolute control, fifty-one percent of the voting stock, you’d have to pay one and a quarter billion dollars at the current market price. Obviously I can’t do that. At the moment I own about three percent of the outstanding stock, which makes me one of the biggest single stockholders. Perhaps the biggest, since Judd scattered his shares.”
“All right. I’ve got a sizable position in NCI, and I’ve got one NCI director already in my pocket.”
“Who?”
“Dan Silverstein. Never mind the questions, Sidney, take my word for it. I’ve got Silverstein on a two-way rack, and when I tighten the chain he makes the right noise; it’s that simple.”
“Now, we’ve got control of Heggins Aircraft, which is listed on the New York Stock Exchange. It’s a respected company. Starting next Monday, we’re launching an advertising campaign under the Heggins banner. We’re asking NCI stockholders to tender their stocks to us. For a limited time-say, four weeks-we’ll give them a forty-six-dollar Heggins convertible debenture for every share of thirty-two-dollar NCI they tender. We’re paying five and a half percent interest on Heggins debentures, which means the stockholder’s trading a thirty-two-dollar stock with a one-dollar annual dividend for a forty-six-dollar debenture with a guaranteed two-and-a-half-dollar annual interest. And they have the right whenever they want to convert the debentures into Heggins common stock at eight dollars a share.”
Isher said, “Where do you get the debentures?”
“We print them. The printing bill might run to two hundred bucks.”
“Sure. And who pays the two-fifty interest?”
“NCI does, after we take it over. Interest on debentures is tax-deductible. The government pays half of the interest. Look, Sidney, the minute we make our tender offer, the price of NCI goes up. Not to forty-six, but to thirty-eight or thirty-nine. A lot of NCI stockholders are going to be anxious to sell at that price.”