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.”
Hackman sat smiling. He tapped his temple. “Beautiful, Mace. Absolutely beautiful.”
Isher said, “Do I understand this right? NCI pays the interest on the debentures? You’re buying NCI stock with NCI’s own money?”
“Exactly right, Sidney.”
“There’s got to be a hitch in it. It couldn’t be that easy, or everybody’d have been doing that kind of thing. What about the NCI board? Do they just sit still and let it happen?”
“Hardly. That’s why I’ve moved to get control of companies like Melbard. I’ve got two others in my pocket as well. They supply NCI with patented components. With control of Melbard and the other two, I’m in a position to raise the royalties on the patents. That would put NCI in a price bind. It would shake public faith in the company and create a wave of distrust. You’d see the price of NCI plunge down to a level where I could pull off the same debenture operation at one-third the price and buy up the controlling margin for peanuts. NCI would come down into my reach even faster.”
“I see. You mean to hold that threat over their heads to keep them peaceful. I still don’t think it’s going to work.”
“It’ll work, Sidney. But it has to be done fast. I’ve had to move into NCI on small cash margin through the factoring banks to pyramid my holdings, and at the moment I’m into them for thirty million dollars, on which I’m going to have to pay something like ten million interest a year. The only way I can handle that is to treat the money as flash loans. I’ve got to get control of NCI fast enough to retire those loans before the interest cripples me. I want the whole debenture campaign worked out by Thursday and the ads placed in the financial pages by Monday morning.”
Isher scowled at him, not replying; it was Hackman who spoke: “Do we let the NCI boys find out about it from the newspapers, or do we talk to them first?”
“We talk to them first. Friday afternoon. You’ll set that up, George.”
“I’d better get on the phone, then.”
Bone-tired, he entered the elevator and rode it down, glancing at his watch. A limousine waited at the curb with a strange driver, a burly man with a polished bald head and baggy gray chauffeur’s uniform and a world-weary face. Villiers spoke curtly to the man and sat back in silence until the car delivered him to Naomi Kemp’s converted brownstone in the Village.
He knocked, heard the typewriter stop clicking, the padding slap-slap of her slippers crossing the bare floor, the inquiring call of her voice. He spoke; she opened the door to him and stood scratching her stomach, and frowned at him. “You look like the wrath of God.”
“I need soap and water and a little sleep. Let me use your shower.” He kicked the door shut behind him.
She looked him up and down, turned, and walked away. Her big freewheeling breasts were bursting out of the scooped apricot blouse. Her walk was tidy and sensually muscular, but she had broad hips and heavy fullnesses of flesh, and there was a danger that once she began to gain weight she would quickly become gelid and loose.
Villiers said, “How’s the book coming?”
“Not well. How can I think in this heat? I suppose you happened to be in the neighborhood, and I just happened to be the closest.”
“That’s right. I didn’t come to get laid.”
“I’m flattered,” she said, sarcasm riding on a flat tone. “You were going to take me to dinner the other night, remember?”
“Something came up.”
“Thanks a lot,” she said. “You know where the shower is.”
He hung his jacket across the back of a chair and slipped the knot of his tie.
Abruptly Naomi walked past him toward the narrow kitchenette, marching with a magnificent jounce and heave of buttocks that seemed to writhe with a life of their own. Her voice trailed back from the kitchenette: “I’d like to throw you out. I don’t know why you make me feel so much like a woman whenever you come in sight- maybe I’m just a round-heeled mattressback.”
He heard the click of the refrigerator. He stripped off his shirt and trousers and bent to remove his socks. She came back into the room with a glass of milk and said, “Quel animal.” Her mouth was big and soft.
She came close, breasts jiggling with taut bounce, put her arms around his neck, and straddled him with her skirt rucked high, her heels gripping his flanks.
“Get down,” he said.
She went over to her desk and sat down, gave him a twisted smile, and shook her head. “Always when you want it, never when I do. Just like when we were kids in Chicago. God, Mace, you’ve never grown up at all-you’re still the same guttersnipe kid who just found out what his balls are for. Emotionally you’re still as hungry as a twelve-year-old-you’re oversexed, and you think it gives you the right to fuck everything in sight. You treat all women as sequels.”
He grunted.
