But Tate was concerned that the plan was too tame, and he didn’t like the sequence of events or the timing. He attributed the error in judgment to John Malouf, who would never know David Quinn the way Tate did. Conceptually, Malouf was every bit as strong as Charles Fielder, but his perspective favored the inanimate-systems, structures, and strategies. He lacked Tate’s sensitivity to human frailty and Kamin’s political savvy. Tate asked one of his administrative assistants to get Malouf on his secure line.
When Malouf came on the line, Tate picked his words carefully, “I have some concerns about the stock-manipulation plan.”
Malouf was a tall imposing man with a habit of using his words sparingly, especially when it made the other person feel uncomfortable. Like his mentor Charles Fielder, he relished the aura of enigma that surrounded him and he rarely explained himself to anyone. But Malouf had proven his loyalty to Tate on more than one occasion.
“I’m listening,” Malouf said now.
“David Quinn needs to be pushed to the brink. I don’t think this plan will do it,” Tate replied, getting straight to the point.
“He’s your client, Wayland. I defer to your judgment.”
“Can I run a few suggestions by you?”
“Go ahead,” Malouf said.
Gazing at the Brooklyn docks across the river, Tate slowly and precisely communicated his suggestions to Malouf.
“David Quinn will suffer through the first event of Kresge’s recommendations getting leaked to the press. It will force him to tell more lies, which is good because it will help deepen his resolve. However, I don’t think event two should be designed for an upswing. And if the event is used later, the new head of merchandizing for America’s Warehouse must come from inside Musselman, one of Quinn’s proteges, who can then hire the rising stars he needs from Costco or Sam’s Club. Events three and four should pose no problem as long as the sequencing and timing are modified. Event five has to change. There can be no merger talks, only acquisition talks. Musselman must do the acquiring, keeping Quinn in control. Possible acquisition candidates might include Star Warehouses or Hardware City, but I’ll leave those details to you and Kamin. Event six will pose no problem, as long as it occurs as an acquisition.”
“I have no issues with your suggestions. In fact, I told Jules that events two and three were questionable. Rest assured, we’ll make the necessary changes,” Malouf said.
“Thank you, John,” Tate said, suddenly concerned about Kamin. Was he still obsessing about the scuttled merger? “Keep me in the loop.”
“Absolutely.”
“I assume you’ll be ready to execute the first event during the Banff retreat?” Tate asked.
“Yes. Just as you specified,” Malouf said.
“Perfect,” Tate said. “I’ll give you any additional thoughts I have on events two and three by tonight.” There was still something else missing from the plan, but for the moment he remained uncertain as to what it was. It would come to him. It always did.
Several hours later, after dealing with a dozen needy clients, Tate breathed deeply as he returned to pondering the Musselman stock-manipulation plan and David Quinn’s psyche. Even if the strategy to make America’s Warehouse a new leader among mass discounters didn’t work, he thought, the marketing campaign alone would drive the stock price up to ninety dollars in less than three months. After that, the business press could assert that Kresge had been right about breaking up Musselman into smaller more manageable pieces, but it wouldn’t matter. The partnership would be cashed out, and Boggs amp; Saggett would continue to be praised for a brilliant advertising campaign. Only Quinn would be blamed for failing to deliver.
On the other hand, if the strategy did work, and Tate still believed it would, there would be much more than ten billion dollars to be made from David Quinn and the J. B. Musselman Company. And that’s why the stock-manipulation plan needed something else to lock Quinn into the partnership long term, Tate concluded.
After the plan’s first event, when the stock had dropped because of a press leak, Quinn would feel distraught and vulnerable. That would be the time to add another event. An imminent hostile takeover of Musselman by Hardware City would push Quinn from feeling distraught and vulnerable to the brink of utter despair. Musselman didn’t have a poison pill to ward off a hostile takeover, and it would never be able to borrow enough money to buy back its own shares because the company already had too much debt. A public stock offering would not only take too long, it would merely exacerbate the problem. And of course selling the company to a friendly suitor would never be acceptable to Quinn, because he’d lose too much control. Quinn’s only option to remain at the helm of Musselman, Tate mused with a smile, would be to accept an offer that he and the partnership would devise-an offer that would force Quinn to do something illegal.
Tate picked up the phone and ran the idea past Bob Swatling. Swatling assured Tate that such a maneuver could be successfully orchestrated. It was a manipulation scheme that Charles Fielder would never have allowed, but things were different now. Tate grinned as he stroked his slightly jutting chin, satisfied that this plan would take Quinn to the brink and provide enough leverage to keep him loyal to the partnership for years to come.
Tate called Malouf to tell him about his final modification. Malouf had no objections, assuring Tate that it fit perfectly with their own modifications. He promised to prepare a final draft of the plan and distribute it by encrypted hush mail within the hour. Sixty minutes later, Tate called Kamin to review the final plan. “Do you anticipate any problems with orchestrating the hostile takeover?” Tate asked.
“Not with Hardware City involved; they owe us big time,” Kamin said.
They both laughed.
“The only concern I have is David Quinn. Are we pushing him too hard, too fast?” Kamin said.
“I know Quinn. He won’t like this, but he’ll do it,” Tate said.
“What does Swatling think?”
“He’s on board,” Tate said, put off by Kamin’s questions. First he let the KaneWeller situation get out of control, then he ignored Malouf’s input on the plan, and now he’s questioning my judgment. Is Jules getting soft? Time will tell. Tate shifted gears. “What’s happening with the Fielder amp; Company acquisition?”
“It hasn’t died yet, but it will soon,” Kamin said.
“It’s better this way.”
“I’m there, Wayland,” Kamin said.
“Good.”
After disconnecting, Tate called Swatling to arrange a meeting with Lester Pickering, CEO of Hardware City Stores. Kamin was right. Pickering would jump at the opportunity to make a quick killing in the market, but, more importantly, he would jump at Tate’s request, because of past favors. Leverage was such sweet currency.
17
Emily — New York City, NY
Manhattan’s Upper West Side was bustling with activity when the taxi dropped Emily Klein at her apartment a little before ten o’clock in the evening. The endless comings and goings had always been one of the main reasons she felt safe living alone in the city. As Emily entered the lobby of her apartment building, she noticed at once that the night security guard was not at his usual post behind the reception desk. Before she had time to become concerned, someone slipped through the door behind her. When Emily turned around, she let out a scream, dropping her shopping bags to the floor. She backed up slowly.