New York. Monday, September 24. Noon.
Responding to the invitation of Tavaris and Deaks, Kerri joined the two for lunch at the Tribeca Grill. With Billie Dukes’ warning fresh in her head, she was prepared for anything.
Armed with a potentially lucrative verbal offer from Enerco, both Tavaris and Deaks were anxious to make it work. They still had the monumental job of obtaining the acceptance of all of the estates of the shareholders, but were confident of success. They knew the offer was rich enough to solve any financial problems encountered by the beneficiaries. They were not, however, confident of obtaining Kerri King’s approval. They chose to approacher her first.
“Let me do all the talking,” Tavaris said to Deaks as they watched her approach their table. Both stood and welcomed her with huge commercial smiles. Tavaris looked after her drink order, then initiated serious discussion. “Kerri, in our meeting at your apartment last Monday night I suggested that one of our options would be a sale of the company. Do you recall that part of the conversation?”
“And you agreed that it was an option you would consider. In fact, you said that everything was on the table. Is that accurate?”
Again Kerri nodded.
Tavaris stroked his stubble, then displayed a smile that made Kerri want to vomit. “We have one... On Saturday, Walter and I received an unsolicited offer from Ken Layton, president of Enerco. It’s a huge energy and trading company in Houston. I’m sure you’ve heard of it.”
“The offer is for three billion dollars. Does that get your attention?”
Kerri completed a quick mental calculation and concluded that the number was generous. She didn’t know Ken Layton, but was aware of his success and of Enerco’s recent spectacular market performance. “It does, but I could use a little more detail,” she said.
“Sure. I’ll begin by saying that Walter and I think it’s a great offer. Ken didn’t want to the trouble and expense of committing it to writing at this point because of the obvious complexity of the shareholding. Instead, he’s asked us to poll the shareholders to get a sense of the acceptability of the offer.”
“Have you talked to any one else about this?”
“You’re the first and only. We reasoned that if the president gives it her seal of approval, the estates will likely follow.”
“Fair enough. I presume it’s an all cash offer.”
Tavaris frowned. “...Ah no, it’s all stock, but take a look at who’s making the offer. Enerco is one hell of a company. You have to agree with that. It’s stock has more than doubled over the past three years, and there’s no question it’s going a lot higher.”
“Do you think Layton is prepared to give any consideration to the Iacardi employees who weren’t shareholders?”
“I’m not sure I understand,” Tavaris said, even though he knew exactly where she was going.
“Let me help you,” she said, clearly annoyed. “Three hundred and thirty-eight Iacardi employees died on September eleventh. One hundred and seventeen of them didn’t own a single share of Iacardi stock. Those people gave their lives for the company, Peter. I need to be assured that if Enerco is serious about buying Iacardi, it’s prepared to do something for them. I’m not prepared to approve a sale that leaves their estates with nothing.”
Kerri’s intransigence had Tavaris in flames. Clearly, Deaks had been correct in his prediction. He had to soften her. To do that, he had to chose between prevent defense and aggression. He chose the latter. “Kerri, Enerco is a business, not some charitable foundation. Don’t misunderstand me. I have a lot of sympathy for those people, but we have an incredible opportunity here, and I don’t want to blow it by making unreasonable demands.”
“Looking after those people is not only reasonable, it’s imperative.”
“Let’s get this straight. As I understand it, the duty of a president is to maximize shareholder value.”
“I agree that it’s one of the president’s responsibilities, but it’s not the only one. Wouldn’t you agree that another one might be looking after the families of employees who gave their lives for the company?”
It was now clear to Tavaris that he was not in a minor skirmish. He was in the fight of his career. He escalated the rhetoric. “You’re treading on dangerous ground, Kerri. If you block this offer, there will be litigation. I’ll guarantee it. The shareholders aren’t going to stand down and let you run this company as a charitable foundation.”
“I’m sure you’re prepared to make sure they don’t,” she said, her voice oozing acid, struggling to conceal her contempt. “I’m not trying to block anything. I’m just trying to do the right thing. I may lose in a court of law, but I’ll win in a court of public opinion, and I’ll be able to live with myself.”
“So let’s get this clear, just for the record. How should the Enerco offer be written to convince you to sign it?”
“I’m prepared to sign a written offer from Enerco, or any other entity that’s interested in buying Iacardi, on the following conditions: all of the shareholders accept it, and it includes a provision to commit to the estates a fixed and acceptable amount of cash, or twenty-five percent of Iacardi’s pre-tax profit for ten years, whichever is greater. I want that money designated for income continuance and for medical insurance premiums.”
Tavaris compressed his lips and raised his arms and eyeballs skyward. “That’s absolute insanity! You’ve just raised the purchase price by at least a billion dollars. There’s no way Enerco, or any other buyer will pay that much, not even for a healthy Iacardi. I don’t need to remind you that currently, Iacardi is on its ass. You should be grateful that Enerco is prepared to pay three billion for it. You’re about to make a lot of people very unhappy.” He turned to Deaks. “This meeting is over,” he said, then stood and marched toward the door.
Deaks followed without saying a word.
As Kerri watched them leave, loneliness invaded her mind and tormented her like never before in her life. In addition, she worried about the dimension of wrath she had wrought.