No Room for Yielding
“This isn’t a situation where you’re making any concessions, is it?”
Corporate mergers and acquisition talks usually took place in one of three places: the investment bank’s office, if it was the sell-side adviser; the conference room of a neutral large law firm; or one of the parties’ headquarters.
Today’s battlefield was the great conference room of Whale Bank, the investment bank chosen to run the sale, right in the heart of Wall Street.
Beneath a ceiling more than three meters high, the walls were lined with portraits of financial titans who had crossed a century and still seemed to look down on everyone else.
White Pierpont Whale—the enormous old man with his long white beard flowing down on both sides—had founded this bank.
“……”
I sat facing that portrait.
On one side of the giant round table sat me and the Lee Energy acquisition team; on the other sat Pittsburgh and the Black Diamond sale team.
Pittsburgh, the boss of Black Diamond, was staring at me without a word.
His gaze was sharp and cold, like an aging eagle fixing on prey.
I thought, Still the same, I see.
He’d been the boss I served until my regression, so I knew his personality inside and out, the way he negotiated, the way he squeezed, the way he waited until the other side blinked first.
At last, the lawyer from the adviser’s side spoke in a flat voice.
“Lee Energy is the sole bidder.”
“……”
Pittsburgh took off his gold-rimmed glasses and set them on the table.
Thunk.
No other buyer meant there was only one lunatic willing to take on Black Bog, that piece of toxic garbage.
I spoke first.
“Let’s get to the point. We’ll acquire only Black Bog’s environmental restoration technology division.”
A faint stir passed through the executives on Black Diamond’s side.
Pittsburgh let out a dry laugh and rose, planting both hands on the table.
“Now listen here, Mr. Lee.”
He looked utterly unconcerned, as if he had all the time in the world.
But I was the only one here who knew better.
When I saw the blue vein standing out at his temple, I knew he was very much on edge.
“Do you think this is a buffet? You pick out the tasty parts and leave the bones behind? That’s not negotiation. That’s theft.”
“Theft? We’re paying good money to buy a waste facility nobody else will touch.”
“Save the wordplay.”
Pittsburgh cut me off with surgical precision.
“If you strip out the technology, what’s left is nothing but a shell headed for bankruptcy. Do you really think our shareholders would accept that?”
“Then what does Black Diamond want?”
“Assume fifty percent of the debt and environmental remediation obligations. No less.”
He leaned back in his chair and folded his arms.
“If you don’t like it, then let’s all just walk out. No need to waste each other’s time. We can always file one subsidiary for bankruptcy and dump the rest through asset sales.”
“……”
I smiled faintly.
Someone else might have been bullied into accepting those terms by the sheer pressure he was putting out, but I wasn’t someone else.
I had a rough idea of Black Diamond’s financial structure and cash position at this point in time.
What was the senior creditor lineup for Black Diamond right now? Off the top of my head, JP Morgan Chase around thirty percent... Citibank twenty... Goldman Sachs ten...
The subordinated debt alone was already over five hundred million dollars.
And once you added fines, penalties, and compensation claims, the total could easily blow past 1.3 billion.
“File for bankruptcy? Ha ha ha—”
“……”
My laughing answer made Pittsburgh flinch.
I leaned forward toward him.
“If you bankrupt Black Bog, the senior lenders will seize every worthwhile asset you’ve got. Texas refining facilities and Gulf of Mexico drilling rights aren’t exactly the sort of things you dump for pennies.”
“……”
“Mr. Pittsburgh. Let me be honest. I want a smooth working relationship with your company. I have no intention of hiding anything or puffing myself up to squeeze out something I don’t deserve.”
“……”
“So let me make another proposal.”
At my words, every executive on Black Diamond’s side swallowed hard.
I looked straight at Pittsburgh.
“We’ll negotiate directly with the Environmental Protection Agency and cut the fines, on the condition that we carry out the restoration work ourselves.”
“Do you really think the EPA will be that easy?”
“That’s why we need your cooperation.”
I held Pittsburgh’s gaze.
“Lend us Black Diamond’s political connections, lobbying power, and legal team for three years. We’ll only use them for three years.”
“In that case, we might as well just sell it—”
“If the fine reduction is secured, the benefit gets split between both sides. Of course, the acquisition terms would change.”
“……”
“As the price for borrowing Black Diamond’s political and legal infrastructure for three years, we’ll divide the burden of Black Bog’s environmental restoration costs and debt obligations. How about Lee Energy taking fifteen percent and Black Diamond eighty-five? As you know, in this kind of market, there isn’t a company out there with that much spare cash.”
Silence settled over the conference room.
Pittsburgh slowly stood up.
“Fifteen to eighty-five?”
“Yes.”
“What kind of calculation gets you from fifty-fifty to that kind of compromise, Mr. Lee?”
“Compromise? No. I’m telling you the maximum cash we can bring to bear. This is us answering your proposal with everything we’ve got. It isn’t a compromise at all. If you don’t like it, I can stand up and walk out of this room right now. If you’re asking for more money from a company that doesn’t have it, what exactly do you expect me to do? Isn’t that just a waste of both our time?”
I threw his own words back at him, almost line for line.
“…… …… …….”
Pittsburgh understood, and so did the executives beside him.
It was better for someone to shoulder fifteen percent than for you to carry one hundred percent alone.
But Pittsburgh couldn’t help bristling at the fact that Black Bog, once one of Black Diamond’s best subsidiaries, had been forced to the auction block like this.
The murmuring from the executives at his side only made him more uneasy.
“If it’s going to go bankrupt anyway, isn’t it better to get fifteen percent?”
“Yeah, exactly. There are tons of people who wouldn’t even take it if you gave it to them for free.”
“Even if it goes bankrupt, the parent company still ends up absorbing the whole mess.”
“And even if we throw every single Black Bog manager in prison, that still won’t be the end of it.”
“If those bastards start talking, we won’t be safe either. Honestly, teaming up with them might look better from the outside...”
I pressed once more.
“Will you settle for salvaging fifteen percent, or will you strap on the full hundred and sink into the black swamp?”
Pittsburgh yanked his tie loose with rough hands.
Then, like a beast growling through its teeth, he said, “If the EPA negotiation fails, who takes the responsibility?”
“Then let’s include a penalty clause for failure. Fair to both sides.”
“Hmph!”
Pittsburgh snatched up the papers scattered across the table.
His eyes moved quickly as he scanned each clause one by one.
He understood better than anyone that cutting away the rotten flesh was the only way the body itself could survive.
At length, he set the documents down.
“...We’ll devote ourselves entirely to the EPA negotiations. You can borrow our personnel too. But let’s make it one year, not three.”
“Fine.”
Black Diamond’s political and legal infrastructure would be a tremendous asset to Lee Energy’s growth.
I reached out my hand, having secured the choicest of the choicest pieces.
Pittsburgh, now facing the prospect of surrendering every valuable asset, ignored my hand.
The adviser’s lawyer took the microphone.
“Lee Energy has been selected as the preferred bidder for the sale of Black Bog.”
Everything was proceeding exactly as expected, exactly as it should.
I didn’t expect anything contrary to the natural order.
* * *
The negotiations wrapped up smoothly.
By the time I left the conference room and headed toward the underground parking garage—
“Chairman Lee!”
Someone suddenly threw himself flat on the floor in front of me.
The man clutching my trouser leg with both hands was Lawrence Vanderbilt, the former president of Black Bog.
“Please, save me! I’ll do anything you tell me to do!”
He lifted a face smeared with tears and snot and looked up at me.
“Please, just don’t let me go to prison... Please don’t let me go to prison! You can do it, can’t you? Say something to Pittsburgh for me!”
“Hmm.”
I stroked my chin once.
“I’ll think about it. I do owe you a debt of gratitude, after all.”
“Huh? A debt of gratitude? To me?”
Lawrence blinked stupidly.
I smiled brightly at him.
“Of course. You did me a great favor.”
“Uh... me? To Chairman Lee? What kind of favor...?”
“That oil field I own in Garden Queens. That worthless patch of land.”
“Ah...”
“Weren’t you the one who said you’d buy that trash heap—where all it could ever produce was filthy water—for a staggering two hundred and fifty dollars an acre? That worthless wasteland that did nothing but back up the sewers of the local residents?”
“I-I... I’m guilty. I was insane back then...”
Lawrence pressed his forehead to the floor and begged.
But before I could say another word, two burly men in black suits grabbed him by the arms and hauled him to his feet.
“Lawrence Vanderbilt? You’re under arrest for embezzlement, breach of fiduciary duty, and securities fraud.”
“W-what? What are you bastards!? Get me a lawyer! Where the hell is my lawyer!”
They twisted Lawrence’s arms behind his back and snapped on handcuffs.
Clack.
Lawrence struggled like a pig being dragged to the slaughterhouse.
But how many pigs ever escaped becoming sausages just because they fought?
His screams faded down the corridor, and I shrugged before going on my way.
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