The Fourth Estate

“I quite understand,” said Sir Paul. “Shall I ask Peter Wakeham to join us?”

“Not if you want the meeting to remain confidential.”

“You’re right,” said Sir Paul. “Where shall we meet?”

“I could drive over to Epsom straight away. I should be with you in about an hour.”

* * *

Tom Spencer skimmed through the first half of the article as his train headed past Mamaroneck on its journey into New York. He only began to concentrate fully when he reached the words:

Keith Townsend’s mistake was to want something so badly that he failed to keep to the basic rules of closing a deal.

Every schoolboy knows that if you hope to exchange old conkers for an unopened packet of crisps, not only must you never blink, you must also wait for your opponent to make the opening bid. But it seems that Townsend was so determined to own Multi Media that he never stopped blinking, and without asking how much Henry Sinclair might be willing to sell the company for, he made an unsolicited offer of $3 billion. He then compounded his problems by agreeing to pay the full amount in cash.

Just as the print unions in New York refer to Mr. Armstrong as “Captain Santa,” Mr. Sinclair could be forgiven for thinking Christmas had come early this year—especially when it was common knowledge that he had been on the point of closing a deal with Armstrong for $2 billion, and even that, it is now thought, would have been too high a price.

Having agreed terms, Mr. Townsend found it extremely difficult to raise the cash within the thirty days stipulated by Mr. Sinclair. And by the time he had finally done so, it was on such exorbitant terms that keeping to the punitive repayment schedule may in the end prove terminal for the rest of Global International. Throughout his life Mr. Townsend has been a gambler. With this deal he has proved that he is willing to risk everything on a single throw of the dice.

On reporting their half-year forecast yesterday, Global shares fell a further eight pence to £3.19.

Over and above any problems the two press barons are currently facing, both of them will be particularly hard hit by the steady rise in the price of paper and the dollar’s current weakness against the pound. If the combination of these trends continues for much longer, even their cash cows will run out of milk.

The future of both companies now rests in the hands of their bankers, who must be wondering—like the creditors of a Third World nation—if they will ever see the interest, let alone the long-term debt, being repaid. Their alternative is to cut their losses and agree to participate in the biggest fire sale in history. The final irony is that it would only take one bank to break the link in the lending chain and the whole edifice will come crashing down.

As one insider put it to me yesterday, if either man were to present a check at the moment, their check would bounce.

Tom was the first person off the train when it pulled in to Grand Central station. He ran to the nearest phone booth and dialed Townsend’s number. Heather put him straight through. This time Townsend listened attentively to his lawyer’s advice.

* * *

When Armstrong finished reading the article he picked up an internal phone and instructed his secretary that if Sir Paul Maitland should call from London, he was out. No sooner had he replaced the receiver than the phone rang.

“Mr. Armstrong, I’ve got the chief dealer at the Bank of New Amsterdam on the line. He says he needs to speak to you urgently.”

“Then put him through,”’ said Armstrong.

“The market is being flooded with sell orders on Armstrong Communications stock,” the dealer informed him. “The share price is now down to $2.31, and I wondered if you had any instructions?”

“Keep buying,” said Armstrong without hesitation.

There was a pause. “I must point out that every time the shares drop a cent, you lose another $700,000,” said the chief dealer, quickly checking the number of shares that had been traded that morning.

“I don’t care what it costs,” said Armstrong. “It’s a short-term necessity. Once the market has settled again, you can release the shares back onto the floor and gradually recoup the losses.”

“But if they continue to fall despite…”

“You just keep on buying,” said Armstrong. “At some point the market is bound to turn.” He slammed down the phone and stared at the photograph of himself on the front page of the Financial Times. It wasn’t flattering.

* * *

The moment Townsend had finished reading the article, he took Tom’s advice and called hi

s merchant bankers before they called him. David Grenville, the chief executive of the bank, confirmed that Global shares had fallen again that morning. He felt it would be a good idea if they met as soon as possible, and Townsend agreed to reschedule his afternoon appointments to fit in a meeting at two o’clock. “You might find it worthwhile to have your lawyer present,” Grenville added ominously.

Townsend instructed Heather to cancel all his afternoon appointments. He spent the rest of the morning being briefed on a seminar that the company was due to hold the following month. Henry Kissinger and Sir James Goldsmith had already agreed to be the keynote speakers. It had been Townsend’s idea that all his senior executives throughout the world should get together in Honolulu to discuss the development of the corporation over the next ten years, where Multi Media fitted into the overall company structure, and how they could best take advantage of their new acquisition. Would the seminar end up having to be canceled too, he wondered? Or would it turn out to be a funeral service?

It had taken twenty-seven frantic days to put together the financial package to acquire Multi Media, and many more sleepless nights wondering if he had made a disastrous mistake. Now it appeared as if his worst fears had been confirmed by a hack on the Financial Times. If only he had failed to make the deadline, or had listened to Tom in the first place.