‘What do you mean, start over?’ said Armstrong.
‘While you were away the unions rejected the $230 million redundancy package you proposed. They’ve come back with a demand for $370 million.’
Armstrong collapsed into his chair. ‘I only have to go away for a few days, and you let everything fall apart!’ he screamed. He looked toward the door as his secretary entered the room and placed the first edition of the Tribune on the desk in front of him. He glanced down at the headline: ‘WELCOME HOME DICK!’
35
New York Tribune
4 February 1991
Captain Dick in Command
‘Armstrong has made a bid of $2 billion for Multi Media,’ said Townsend.
‘What? That’s like a politician declaring war when he doesn’t want people to realize how bad his problems are at home,’ said Tom.
‘Possibly. But like those same politicians, if he pulls it off, it just might sort out his problems at home.’
‘I doubt it. After going through those figures over the weekend, if he stumps up $2 billion it’s more likely to end up as yet another disaster.’
‘Multi Media is worth far more than two billion,’ said Townsend. ‘It owns fourteen newspapers stretching from Maine to Mexico, nine television stations, and the TV News, the biggest-selling magazine in the world. Its turnover alone touched a billion last year, and the company declared an overall profit of over $100 million. It’s a cash mountain.’
‘For which Sinclair will expect to be given Everest in return,’ said Tom. ‘I can’t see how Armstrong can hope to make a profit at $2 billion, especially if he has to borrow heavily to get it.’
‘Simply by generating more cash,’ said Townsend. ‘Multi Media has been on autopilot for years. To start with, I’d sell off several of the subsidiaries that are no longer profitable and revitalize others that should be making far more. But my main efforts would concentrate on building up the media side, which has never been properly exploited, using the turnover and profits from the newspapers and magazines to finance the whole operation.’
‘But you have more than enough to worry about at the moment without getting involved in another takeover,’ said Tom. ‘You’ve only just settled the strike at the New York Star, and don’t forget that the bank recommended a period of consolidation.’
‘You know what I think of bankers,’ said Townsend. ‘The Globe, the Star and all my Australian interests are now in profit, and I may never have an opportunity like this again. Surely you can see that, Tom, even if the bank can’t.’
Tom didn’t speak for some time. He admired Townsend’s drive and innovation, but Multi Media dwarfed anything they had ever attempted in the past. And however hard he tried, he just couldn’t make the figures add up. ‘There’s only one way I can see it working,’ he said eventually.
‘And how’s that?’ asked Townsend.
‘By offering him preference shares — our stock in exchange for his.’
‘But that would simply be a reverse takeover. He’d never agree to it, especially if Armstrong has already offered him two billion in cash.’
‘If he has, God knows where he’s getting it from,’ said Tom. ‘Why don’t I have a word with their lawyers and see if I can find out if Armstrong really has made a cash offer?’
‘No. That’s not the right approach. Don’t forget that Sinclair owns the entire company himself, so it makes a lot more sense to deal with him direct. That’s what Armstrong will have done.’
‘But that’s hardly your usual style.’
‘I realize that. But it’s become rare for me lately to be able to deal with anyone who owns their own company.’
Tom shrugged his shoulders. ‘So, what do you know about Sinclair?’
‘He’s seventy,’ said Townsend, ‘which is why he’s retiring. In his lifetime he’s built up the most successful privately-owned media corporation in the world. He was the Ambassador to the Court of St. James’s when his friend Nixon was president, and in his spare time he’s put together one of the finest private collections of Impressionist paintings outside a national gallery. He’s also chairman of a charitable foundation which specializes in education, and somehow he still finds time to play golf.’
‘Good. And what do you imagine Sinclair knows about you?’
‘That I’m Australian by birth, run the second-largest media company in the world, prefer Nolan to Renoir, and don’t play golf.’
‘So how do you intend to approach him?’
‘Cut out the bullshit, call him direct and make an offer. At least that way I won’t spend years wondering if I might have pulled it off.’ Townsend looked across at his lawyer, but Tom made no comment.
Townsend picked up the phone. ‘Heather, get me Multi Media headquarters in Colorado. And when they come on, connect me to the operator.’ He replaced the receiver.
‘Do you really believe that Armstrong has put in a bid for two billion?’ asked Tom.
Townsend considered the question for some time. ‘Yes, I do.’
‘But where would he find that amount of cash?’
‘Wherever he found the money to pay off the unions would be my guess.’
‘And how much do you intend to offer?’
The phone on the desk rang before he could answer.
‘Is that Multi Media?’
‘Yes, sir,’ replied a deep Southern voice.
‘My name is Keith Townsend,’ he said. ‘I’d like to speak to Mr. Sinclair.’
‘Does Ambassador Sinclair know you, sir?’
‘I hope so,’ said Townsend. ‘Otherwise I’m wasting my time.’
‘I’ll put you through to his office.’
Townsend made a sign to his lawyer that he should listen in on the extension. Tom picked up the phone on the side table next to him.
‘Ambassador Sinclair’s office,’ said another Southern voice.
‘It’s Keith Townsend. I was rather hoping I might be able to have a word with Mr. Sinclair.’
‘The Ambassador is at his ranch, Mr. Townsend, and I know he’s due at the country club in twenty minutes for his weekly golf lesson. But I’ll see if I can catch him before he leaves.’
Tom put his hand over the mouthpiece and said quietly, ‘Call him Ambassador. It’s obvious that everyone else does.’
Townsend nodded as a voice came on the line and said, ‘Good morning, Mr. Townsend. Henry Sinclair here. How can I help you?’
‘Good morning, Ambassador,’ said Townsend, trying to remain calm. ‘I wanted to have a word with you in person, so as not to waste unnecessary time dealing through lawyers.’
‘Not to mention unnecessary expense,’ suggested Sinclair. ‘What is it that you felt you had to speak to me about, Mr. Townsend?’
For a moment Townsend wished he’d spent a little more time discussing tactics with Tom. ‘I want to make a bid for Multi Media,’ he said eventually, ‘and it seemed sensible to deal with you direct.’
‘I appreciate that, Mr. Townsend,’ said Sinclair. ‘But remember that Mr. Armstrong, with whom I believe you are acquainted, has already made me an offer I was able to refuse.’
‘I’m aware of that, Ambassador,’ said Townsend, wondering how much Armstrong had really offered. He paused for a moment, not looking in Tom’s direction.
‘Would it be too much to ask the figure you have in mind, Mr. Townsend?’ said Sinclair.
When Townsend replied, Tom nearly dropped the phone on the floor.
‘And how would you intend to finance that?’ asked Sinclair.
‘In cash,’ said Townsend, without any idea how he would raise the money.