Villiers Touch (33 page)

“Why shouldn't I? They're my corporations.”

“That don't make it your money to sling around. I'd feel a lot happier if you'd sell off enough NCI shares to pay off the margin. I'm still holding your Amalgamated Elcom check to cover it, but I don't want to put that check through—I can return it to you, you tear it up, it won't have to show on anybody's books. Mace, you're too deep into the Amalgamated Elcom reserve fund. You got no legal right to draw money out of it at all. I could get in a hell of a mess.”

“Stop sweating,” Villiers said mildly. “Elcom's as sound as granite. They've just discovered four hundred square miles of bauxite aluminum ore in Canada.”

“It says here. Christ, you started that rumor. How much you want to bet there's no bauxite at all on that lease? All you wanted was to boost the price so you could issue carpets of the stock and trade it for NCI shares.”

“Sometimes you surprise me a little,” Villiers said, and as an afterthought showed a smile.

The yellowish, magnified stock tape moved rapidly across the screen. Villiers said in the same cool, even voice, “You're wrong on one point, George. I haven't got ninety thousand shares of NCI. That's only the part you've bought in your street name. My position in NCI, as of this morning, runs to approximately one million, seven hundred thousand shares.”

Hackman just stared at him.

By the time Sidney Isher arrived at ten-thirty, Hackman was sitting back beaming with an H. Upmann cigar jutting from his mouth at a jaunty angle, his glad-handing smile pasted on as if it would never come off.

When Isher sat down, Villiers thought at first—astonished—that Isher was winking at him. Then he remembered it was a tic, a permanent affliction, the quivering of Isher's eyelid. It flicked and drooped of its own volition, and Isher probably had long ago lost his awareness of it. What unsettled Villiers' was that he had forgotten it.
Not enough sleep
, he judged.

Isher said, “I hear Farouk's nineteen-thirty Alfa Romeo is up for sale in Boston.”

“I'm looking into it,” Villiers said. “Right now we're going to have a conference. I want both of you wide awake.”

“All right. Go ahead.”

“I'm ready to come out in the open,” Villiers said. “You two would have to know all of it eventually anyhow—I've held it back because you both get so damned nervous over the big ones. But now I'm going to spell it out so you'll know what we're after and what to look out for along the way.”

Isher slid back in his chair and cleared his throat. “It's about time,” he muttered.

“Yes sirree Bob,” said Hackman.

“My aim,” Villiers said, spuriously casual, “is to take control of Northeast Consolidated Industries.”

Hackman beamed. “Sure.”

Isher was blinking and rubbing his eyes. “NCI?” He seemed unsure he had heard right.

“Does it make sense now, Sidney?”

Isher's Adam's apple bobbed. “I'm, ah, not sure.”

“Melbard was only a preliminary. That's why I didn't care what I had to pay to get it. The same with Nuart and Heggins Aircraft. You see—”

“Mace, maybe you ought to start at the beginning and take it slow for the benefit of us country folks.”

Villiers disliked being interrupted but this time he let it go. “You're probably right. All right, from the top. I started by piling up capital. Used every gimmick I could think of to raise dimes and dollars. I've got boiler rooms running around the clock. I've nursed more than a dozen companies I own—manipulated the books, fabricated figures, issued glowing annual reports, all of which is designed to show big paper profits and boost the prices of the shares. I borrowed money from myself through dummies, used fresh-printed stock as collateral, and defaulted on the loans. That leaves me free to sell them in the open market without having to register them as a new issue—I dumped the stock in small doses as distress shares, liquidated as foreclosures. We avoid government scrutiny that way, and the public doesn't have any way of knowing these are fresh new shares with the ink still wet. I slipped them onto the market out of Canada, over the counter and through the boiler rooms—that kind of small investor isn't likely to offer it soon for resale on the major exchanges, so nobody knows we've flooded the market with new paper and diluted the value of the shares.

“I used one trick I learned from you, George—bought small amounts of my own stocks on the exchanges at the close of the trading day, paying a higher price than the last previous quotation. That way the stock shows an uptick on the listings. Keeps the price up and sustains the appearance of activity, which makes the stock more attractive to the over-the-counter buyer.”

“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.”

“Okay, but who's going to buy it at that price? You won't have that many buyers convinced the merger will take place.”

“Hell, I'd buy every share I could grab,” Hackman told him. “You've got a guaranteed split there. Money in the bank.”

“I don't follow that,” Isher said, and coughed.

Villiers said, “George is right. The brokers will snap it up. You've got NCI selling at maybe thirty-eight, with Heggins convertibles at forty-six. A broker can take that spread and make it into a guaranteed arbitrage profit. He buys up NCI and sells Heggins short. If the price goes down, he makes good his short sales. If the merger comes off, he turns in the NCI shares for Heggins debentures, converts them to voting common, and gives them back to the guy he borrowed from when he sold short. Either way, he clears a profit that's locked into the eight-dollar spread.”

Hackman said, “Absolutely. Every clown down here in the Street will buy every share of NCI he can grab.”

“And so,” Villiers said, “the brokers will buy the NCI stock for us. They'll buy, and keep buying, and in the end they'll have forty or fifty percent of the outstanding NCI shares. They'll convert them into Heggins debentures, which means we give them Heggins and they give us NCI. We get forty percent of NCI or more for Heggins paper, and we go out and buy up from NCI stockholders however much more we need to get fifty-one percent of the company.”