in to this…
Having gone in to the office the day following Adrian’s arrival I ’d learnt that Allied Grampian had called again and persuaded Alec that their client really was serious and that we should at least meet and see what t he y were offering. The client was apparently in Bristol that day and when they had suggested lunch Alec had reluctantly agreed.
Lunch had been at a restaurant on the wharf and when Alec and I arrived we ’d been shown to a booth where three other men were already seated. They all rose as we arrived, one was Stewart Logan from Allied Grampian, a tall, greying Scots banker, probably in his fifties. I had done some brief research on him and he seemed to have a reputation as a reliable middle of the road investment banker.
Logan had introduced the other two as a Mr Octavian Plavsic and his colleague Mr Joseph Narai from an obscure sounding company called Mendip Finance. Plavsic, obviously the boss, was in his early to mid forties; dressed expensively in a dark suit, grey silk shirt and tie, and shiny black moccasin shoes. If he had not had a soft east European accent he might almost have come out of a Mafia movie! His colleague had the same accent but was in a more conventional grey city suit, late twenties, and carried the briefcase and papers. We all shook hands and sat down.
Over lunch the conversation had been routine including the usual England World Cup recriminations. Plavsic commented that England seemed to have lost the will to win in soccer as well as many other areas. I am not a fan of heavy Italian food at lunchtime and after strugglin g through pasta with salad I’d been glad to see Logan start to get down to business.
He ’d briefly described the services offered by his bank and said that Mendip Finance were long standing clients of the bank. Narai, prompted by Plavsic, and frequently interrupted by him, had then gone on to talk about Mendip Finance. In short it turned out that they were an investment and trading company based in London and Zurich. He claimed Mendip was involved in commodity trading in Africa and Asia and had equity investments in a number of corporations in the UK, Germany and USA.
I have little time for all of this type of padding and had interrupted. “OK, so why are you interested in us, I do n't sense much synergy?' I sense d Alec sighing quietly at my impatience and lack of finesse.
“Well,” Plavsic had said, “you might be surprised at the range of businesses we have invested in. We are interested in making money and we believe that when you launch ForceNet this company will make real money.'' Alec had glanced at me. ForceNet was not a published name and no public announcements had been made about the product.
Logan saw my glance and said, “It's widely rumoured in the market that you have a major new product, that is why your brokers are able to wind up the prospective IPO price.”
“Let's stop beating the bush” said Plavsic, “is that the right expression?”
“Beating about the bush,” I ’d corrected with a tired smile.
“Thank you,” he ’d said returning the smile, and then turning to Alec, “We would like to buy your company and are prepared to pay a very good price. It would be a full cash purchase. Nearly as good as you might get from a successful IPO but with much greater certainty, none of the risks of an IPO, and far fewer restrictions on the current shareholders.”
“We all know the complicatio ns of a public offering,” Stewart Logan had added, “there is a lot to be said for not going down that road.” He ’d then looked at Plavsic, who ’d continued.
“Of course we would still want you two involved in the Company and there could be an opportunity for you to retain equity so as to participate in the future benefits of the new products if you wished.”
Alec had looked at me sideways, and then said to Plavsic. “We can look at any offer although you need to understand that we are a long way down the road to preparing for a float so I am not sure how interested we would be at changing course at this late stage. To get the attention of our board you would need to move quickly”.
Plavsic nodded at Logan who ’d said, “We could get a draft term sheet to you by tomorrow afternoon”.
We ’d been stunned that they were ready to move so rapidly but Alec recovered quickly and said, “to make any offer meaningful Allied Grampian would also need to give us some form of Letter of Comfort that Mendip Finance have the resources to be able to do a deal like this. No disrespect Mr Plavsic, but we don't know you or your company, and we would need to be able to convince my board that the proposal merited them spending time reviewing it, by providing some evidence that you would be able to complete should a deal be done”.
“Perfectly understandable” said Logan, “I would think the Bank should be able to give you something acceptable”. Logan then went on to say that they had better get back to the office and start work on preparing the paperwork. With that we all rose and shook hands and he, Plavsic, and Narai left. Alec and I sat down and ordered coffee.
“I think we need t o discuss this with Frank”, Alec had said. Frank Whittle is our non-executive Chairman and a wily old bird with many years experience in the world of banking and finance. “I’ll call him”. With that he was on his mobile. A few minutes later he ’d said “Frank will be in Bristol in the morning, we could have a breakfast meeting, are you around?”
“Yes” He went back on to the mobile,
“We can make breakfast Frank, where will you be in an hours time? I want to give you some background but I don't want to do it on a mobile? OK, an hour and a half at your place”. With that he hung up and looked at me with a sigh. “What do you think about all that”?
We ’d then talked for a while. Logan seemed a straightforward banker, and Narai your typical bright MBA lackey, but neither of us could really make much of Plavsic. Alec had also noticed the slight East European accent, but other than thinking that he was not your typical city businessman there was little to add. Personally I had not taken to Plavsic. One of my failings, I tend to make early people judgements and Plavsic was someone I would not trust. No clear reason, just a feeling.
Next morning we ’d me t with Frank at the deli coffee shop just round the corner from the office. The coffee was good and sitting in the corner one could have a quiet discussion without being easily over heard. I ’d arrived early, got a coffee and bagged a secluded corner table. As I ’d sat down a voice said “ good morning Mr Lever, early start today”? I ’d turned to see Gordon Stewart a few tables away sitting on his own with a coffee in front of him. He ’d waved and I, somewhat surprised, waved back. What was he doing here?
Just then Alec and Frank arrived, Alec had apparently picked Frank up from Temple Meads station.
Alec organised coffees for himself and Frank and breakfast for himself. I had eaten at home and Frank had breakfast on the train. Having told Alec of Stewarts presence we ’d then gone on to discuss Mendip Finance and the meeting yesterday. It was obvious that Alec had filled Frank i n with all of the detail by phone the previous evening. Frank did not know Mendip Finance but he was of course aware of Allied Grampian whom he described as a solid “middle of the road” investment bank.
As far as the potential offer for the Company was concerned Frank had been surprised, but said that if it were genuine then it would have to be considered and presented to the board. “Of course he said, in many ways the decision is down to you two. Between you, you hold 60 % of the company”. He was right though I doubted Armstrong Ventures would totally agree. Armstrong was the venture capitalist that held a further 30 % of the company, the remaining 10 % being held by Frank and key staff. Armstrong would definitely have a view!
Alec had got up and went to pay the bill and, a s we were about to follow Stewart had came ac ross with his coffee and sat himself down in front of us.
“Good morning gentlemen”, he ’d said.
I ’d introduced him somewhat sarcastically to Frank, “this is the spook we told you about, Frank” at which Stewart protested and restated his MoD credentials.
“Don’t mind him, he means well!”
Stewart had laughed, “We would like to meet with you and take our earlier conversations with Mr Bell and Mr Lever further?”
“I am only in town for the day and I am pretty tied up. ”
“We would prefer to do it in London, any way” said Stewart, “preferably at our place, as some of my colleagues would like to join in”.
“Give me a call tomorrow and we can set up a time, the meeting will need to include Alec so I will check his availability.” With that we ’d got up and left Stewart sitting at the table with his coffee.
As we joined Alec at the door Frank explained the situation to Alec. “ I think we need to follow this up and
