“Better than fifty-fifty. My father would never have considered going ahead with such odds,” added Richard.
“But my father would have,” said Florentyna. “He always considered a glass to be half full, never half empty.”
“Thaddeus Cohen was right.”
“About what?”
“About you. He warned me that if you were anything like your father, prepare for battle.”
During the next three months Richard spent most of his time with accountants, lawyers and tax consultants, who had all the paperwork completed for him by March 20. That afternoon he booked space on every major financial page in America for April 1 and informed the advertising departments that the copy would arrive by hand twenty-four hours prior to publication. He couldn’t help reflecting on the date and wondered if it would be he or Jake Thomas who would end up the fool. During the final two weeks, Richard and Thaddeus Cohen checked over the plan again and again to be certain they hadn’t overlooked anything and could be confident that the details of “Operation Bust a Gut” remained known to only three people.
On the morning of April 1, Richard sat in his office and studied the full-page advertisement in The Wall Street Journal:
The Baron Group announces that it will offer fourteen dollars for every Lester’s Bank share. The current market value of Lester’s shares is eleven dollars and a quarter. Any persons wishing to take advantage of this offer should contact their broker or write direct for details to Mr. Robin Oakley, Chase Manhattan Bank, One Chase Manhattan Plaza, New York, N. Y. 10005. This offer remains open until July 15.
In his article on the facing page, Vermont Royster pointed out that this bold bid to take over Lester’s must have had the support of Chase Manhattan, which would be holding the stock of the Baron Group as security. The columnist went on to predict that if the bid succeeded, Richard Kane would undoubtedly be appointed the new chairman, a position his father had held for more than twenty years. If, on the other hand, the move failed, the Baron Group might find themselves with severe cash restrictions placed on their reserves for several years because the Group would be encumbered with a large minority shareholding without actually controlling the bank. Richard could not have summed up the situation more accurately himself.
Florentyna called Richard’s office to congratulate her husband on the way he had carried out Operation Bust a Gut. “Like Napoleon, you have remembered that the first rule of war is surprise.”
“Well, let’s hope Jake Thomas is not my Waterloo.”
“You’re such a pessimist, Mr. Kane. Just remember, Mr. Thomas is probably sitting in the nearest men’s room at this moment and he doesn’t have a secret weapon and you do.”
“I do?” said Richard.
“Yes. Me.” The phone clicked and rang again immediately.
“Mr. Thomas of Lester’s Bank on the line for you, Mr. Kane.”
I wonder if he has a phone in the men’s room, thought Richard. “Put him through,” he said, understanding for the first time a little of what the confrontation between his father and Abel Rosnovski must have been like.
“Mr. Kane, I thought we ought to see if we can sort out our differences. Perhaps I was a little overcautious in not offering you a place on the board immediately.”
“I’m no longer interested in a place on the board, Mr. Thomas.”
“No? But I thought—”
“No. I am now interested only in the chair.”
“You do realize that if you fail to secure fifty-one percent of Lester’s stock by July fifteenth, we could institute immediate changes in the allocation of bearers’ stock and voting shares that will diminish the value of the stock you already hold? And I feel I should add that the members of the board already control between them forty percent of Lester’s stock, and I intend to contact all other shareholders by telegram today with a recommendation not to take up your offer. Once I am in possession of another eleven percent, you will have lost a small fortune.”
“That’s a risk I’m willing to take,” said Richard.
“Well, if that’s your attitude, Kane, I shall call a full shareholders’ meeting for July thirtieth and if you haven’t obtained your fifty-one percent by then I will personally see to it that you are kept out of any dealing with this bank for as long as I am chairman.” Thomas’s tone suddenly changed from bullying to ingratiating. “Now perhaps you might like to reconsider your position.”
“When I left your office, Mr. Thomas, I made it clear what I had in mind. Nothing has changed.” Richard put the phone down, opened his diary to July 30 and put a line through the page writing across it: “Stockholders meeting, Lester’s Bank,” with a large question mark. He received Jake Thomas’s telegram to all stockholders that afternoon.
Every morning Richard followed the response to his advertisement with calls to Thaddeus Cohen and Chase Manhattan. By the end of the first week they had picked up 31 percent of the shares, which with Richard’s 8 percent meant that they held 39 percent in all. If Thomas had in fact started with 40 percent, it was going to be a tight finish.
Two days after his phone call from Jake Thomas, Richard received a detailed letter sent by Thomas to all shareholders, advising strongly against consideration of the offer from the Baron Group. “Your interests would be transferred into the hands of a company which until recently was controlled by a man convicted of bribery and corruption,” stated the final paragraph. Richard was disgusted by Jake Thomas’s personal attack on Abel and he had never seen anything make Florentyna so angry.
“We are going to beat him, aren’t we?” she asked, her fingers clenched into a tight fist.
“It will be close. I know they have over forty percent among the directors and their friends. As of four o’clock this afternoon we have forty-one percent, so it’s a battle for the last nineteen percent that will decide who wins on July thirtieth.”
During the end of the following month, Richard heard nothing from Jake Thomas, which made him wonder if he had already captured fifty-one percent, but with only eight weeks left until the stockholders’ meeting it was Richard’s turn to read over breakfast a full-page advertisement that made his heartbeat hit 120. On page 37 of The Wall Street Journal Jake Thomas had made an announcement on behalf of Lester’s. They were offering two million shares of authorized but previously unoffered stock to be sold for a newly set-up pension fund on behalf of the bank’s employees.
In an interview with the Journal’s chief reporter, Thomas explained that this was a major step in profit sharing and the funding of retirement income that would be a model to the nation both inside and outside the banking fraternity.
Richard swore uncharacteristically as he left the table and walked toward the phone, leaving his coffee to go cold.
“What did you say?” said Florentyna.
“Balls,” he repeated, and passed her the paper. She read the news while Richard was dialing.
“What does it mean?”
“It means that even if we do acquire fifty-one percent of the present stock, Thomas’s authorized issue of a further two million shares, which you can be sure will be sold only to the institutions, thus making it impossible to defeat him on July thirtieth.”
“Is it legal?” inquired Florentyna.
“That’s what I’m about to find out,” said Richard.
Thaddeus Cohen gave him an immediate reply. “It’s legal, unless you succeed in getting a judge to stop them. I was in the process of having the necessary papers drawn up, but I warn you, if we are not granted a preliminary injunction you will never be chairman of Lester’s.”
During the next twenty-four hours Richard found himself rushing in and out of lawyers’ offices and courtrooms. He signed three affidavits and a judge in chambers heard the case for an injunction. This was followed by a special expedited appeal in front of a three-judge panel which, after a day of deliberation, came down two to one in favor of holding up the share offering until the day after the extraordinary general meeting.
Richard had won the battle but not the war; when he returned to his office the next morning, he found he still had only 46 percent of the stock needed to defeat Jake Thomas.
“He must have the rest,” said Florentyna forlornly.
“I don’t think so,” said Richard.
“Why not?” she asked.
“Because he would not have bothered with that smoke screen exercise of the pension fund shares if he already had fifty-one percent.”
“Good thinking, Mr. Kane.”
“The truth is,” said Richard, “that he fears we have fifty-one percent, so where is the missing five percent?”
During the last few days of June, Richard had to be stopped from phoning Chase Manhattan every hour to discover if they had received any more shares. When July 15 came he had 49 percent and was acutely aware that in exactly fifteen days Thomas would be able to issue new voting shares that would make it virtually impossible for him ever to gain control of Lester’s. And because of the cash flow requirements of the Baron Group, he would have to dump some of his Lester’s stock immediately—no doubt, as Jake Thomas had predicted, at a considerable loss. He found himself mumbling “two percent, only two percent” several times during the day.
With only a week to go, and with Richard finding it hard to concentrate on the new hotel fire regulations being put into effect, Mary Preston phoned.
“I don’t know a Mary Preston,” Richard told his secretary.