'Certainly. What is it?'
'It's a company called Mix N Match. Have you heard of it?'
I pursed my lips in concentration. 'Yes, I think so. It's a retailer based in Florida. It has been having a tough time recently, I think.'
'That's right,' said Hamilton. 'Do you know anything else about it?'
'No, I'm afraid not,' I lied.
'Well, I got a call from Claire about it just now. The bonds are trading at twenty cents on the dollar, apparently. Everyone expects the company to file for bankruptcy. Claire says there is a rumour it is about to be taken over by the Japanese.'
I raised my eyebrows. Hamilton caught my expression. 'Yes, I know,' he said. 'It's only a rumour. And Claire knows very little about junk bonds. But if she is right, we make eighty cents; if she is wrong, the most we can lose is twenty. I think it's worth a look. Claire should be faxing some stuff through soon. See what you make of it.' He walked back to his desk, and then hesitated. 'But make sure you don't talk to anyone outside the firm on this.'
'Right,' I said, and set to work. I collected all the data we had on Mix N Match from our own files. I didn't have long to wait for Claire's fax. Then I set to work, surrounding myself with papers, and tapping financial information into my computer.
I had selected Mix N Match as the best of the five companies I had looked at the previous day. It didn't look a bad investment at twenty cents; even in bankruptcy, bondholders should be able to get fifty cents on the dollar at least. With a takeover play to aim for as well, it made a hell of a good trade. Irresistible, I hoped.
For the next four hours I put together an elaborate analysis of the company in bankruptcy. I carefully valued all the assets, and put the results on a nice spreadsheet, which I printed off, and showed to Hamilton. He had been hovering over my shoulder for much of the time, and had read a lot of the material himself. He looked at the spreadsheet and stroked his beard, thinking.
I left him to it, and made a quick phone call. Cathy answered. 'He's ready. Get Cash on the phone to him now,' I whispered, and hung up.
Within thirty seconds, the light flashed on the phone board. Karen picked it up. 'Hamilton! Cash on line one!' she called.
Hamilton was lost in thought. 'Tell him I will get back to him,' he said. Damn! I hadn't considered that Hamilton would play hard to get.
Karen got rid of Cash and called across, 'Get back to him when you have a moment. It's about 'Mixer Mash' or something.'
Hamilton stiffened slightly. I knew he wouldn't call Cash back straight away, that would appear too eager. He waited five minutes before picking up the phone. He and Cash spoke for half an hour. When he had finished he called over to me.
'Well, you picked a good day to come back. I'm glad you are here, you can make yourself useful. Mix N Match may be more interesting than we thought.'
'Oh yes?' I said. I didn't have to fake excitement.
'That was Cash. Funnily enough he wanted to talk about Mix N Match. Apparently the Tokyo Stock Exchange is full of the rumour that the company is about to be taken over by a major Japanese retailer.'
I interrupted. 'You can't trust Cash on something like that, can you?'
'That's right, you can't. But it's nice that Claire's rumour is corroborated. The really interesting thing is that Cash is coordinating a consortium of investors to buy up the outstanding debt of Mix N Match.'
'What's the point of that?' I asked.
'The idea is to form a Special Purpose Vehicle that owns most of the debt of Mix N Match, and then force the Japanese to pay out par on the bonds when the company is taken over.'
'I see. So who are the other investors?'
'Just one so far. But he is big. Irwin Piper.'
'But he's a crook!' I said. 'You don't want to have anything to do with him, surely.'
'He might not be whiter than white, but he is smart,' Hamilton said. 'He is putting in twenty million dollars. Cash wants twenty million from us, and he thinks he has an investor in the States he can get another twenty from.'
'So let me get this straight,' I said. 'De Jong invest twenty million in a Special Purpose Vehicle, along with forty million from Piper and this other investor. The SPV uses the sixty million dollars to buy bonds on the open market. Mix N Match gets taken over by the Japanese, who find themselves facing a powerful owner of a majority of the outstanding bonds. We can negotiate a big pay-out under the covenants of the bond indenture.'
'Exactly,' said Hamilton. 'And if the takeover doesn't happen, and the company goes into bankruptcy, then according to your analysis, we should still make a profit.'
'OK, so what next?'
'Apparently Piper has already got the documentation drawn up. He is using Denny Clark as his solicitors. He is arriving in the country tomorrow morning. We can meet him at Denny Clark's offices. You can come if you want.'
Rob was hovering, straining to hear as much of the conversation as he could. 'Can I join you?' he asked Hamilton. 'I would like to find out more about the junk bond market and you will probably need some help once Paul has finally gone.' Rob said all this without once looking at me.
Hamilton raised his eyebrows, thought for a second, and then nodded.
I went back to my desk. Karen said there was a John Smith from the agency, on hold, for me. It turned out to be Cash.
'Couldn't you think of a better name than that?' I said.
'Hey, someone's got to be called John Smith,' said Cash. 'Did he swallow it?'
'Hook, line and sinker,' I said. 'Let's just hope Piper manages to do as good a job as you.'
'Don't worry. That guy is a real pro when it comes to conning people. How do you think he made all that money in the first place?'
'You have a point there,' I admitted.
'I gotta go,' said Cash. 'I've got a deal to sell to a certain Arizona savings and loan.'
CHAPTER 22
Hamilton, Rob and I walked into Denny's office. Four people sat around one end of the long conference table- Denny, Irwin Piper, Cash and Felicity. The portrait of the ancestral Denny stared down at us, reminding us that we were in the offices of a very respectable law firm and we had better behave accordingly. Denny did the introductions, mentioning that Felicity had been responsible for drafting the documents. She looked tired, which wasn't really surprising. She had had an awful lot to do in not very much time.
There were really only two people in the meeting, Hamilton and Piper. Piper began, 'Cash has told me a lot about your operation, Mr McKenzie. I must say it sounds very successful. I am familiar with a number of similar outfits in the US, and they all do very well.'
Hamilton ignored the flattery completely. He came straight to the point. 'Tell me about Mix N Match,' he said.
Piper leaned back in his chair, and made an arch with his fingers, shooting starched white cuffs and monogrammed gold cuff-links out from under his jacket sleeves. 'I have been investing in companies one way and another for twenty years now, and I am pretty good at it. Once every decade comes an opportunity that's too good to miss, an opportunity to risk a substantial sum in the near certainty of making a killing. Everyone comes across such opportunities, but most people don't recognise them for what they are. They make a quick buck and nothing more. Now, Mix N Match is one of those rare opportunities. Limited downside, plenty of upside. This company will be taken over by the Japanese,' Piper paused to emphasise his conviction, 'and when it is I am going to make a lot of money.'
Hamilton gazed at him, expressionless.
'Do you want to join me?' said Piper.
