INTELLIGENCE IS VALUABLE - Part 1 Setting the Scene
Intelligence information during the conduct of a takeover or merger has becoming increasing valuable to both parties, as well as the professional advisers earning huge fees from achievement of a successful takeover or as break fees from the target company. Truth is there never is a merger of equals and one party is going to be the dominant entity and the other, whether it knows it or not, will be screwed.
If one party has inside intelligence of the other party, its accounts, operations, bid ranges and the like, it is able to manipulate a better deal either for itself and its shareholders or the senior executive team or both.
We regularly see access to what are called data rooms during this process and the other party seeking the takeover will be forced to sign confidentiality agreements to protect the target company and its records outside the current bid.
If there is another predator out there waiting to see progress, it can be in the interests of the target company to leak information to that predator as a means of generating a higher competing bid. Alternatively, the predator may be willing to assist the financial resources of some of the key executives who soon will be out of work with additional funds unbeknown to the bidder; these are sometimes referred to as secret commissions and invariably are highly illegal and morally corrupt.
Commonly the bidder and the target company employ security firms to prevent the leaks and to identify both data being leaked and the individuals involved. Many techniques are employed, including IT, surveillance cameras and under cover persons, with the larger the deals involved the more competent and effective must be the teams involved.
What follows over a few parts is a case of a very large takeover, an imbroglio erupting out of the targets key executives, how people can become pawns in a very large game and some persons where they possess no moral principles. We have our own "Wolf" and a number of execs looking to retire to the Bahamas as soon as possible after the takeover is concluded.
That Phone Call.
Charles: Good morning Charles Security Services.
The ultimate phone call starts off a tough next day that just keeps getting complicated.
James: Hi Charles this is James, we spoke recently at the Las Vegas IT Conference. You gave me your card and suggested I call.
Charles: Oh hi James, did not expect to talk again so soon.
James: I need you guys urgently. Can you be in my office first thing say 6.00am tomorrow morning. Cannot talk on the phone. Will explain then. Assignment is likely to be for a month. OK.
Charles: Done. Just need access at the ground floor entry.
Charles remembered James well. He was a tall intense man that oozed control, discipline and wealth. Probably around 50 to 55 years, greying, but fit and alert. His recall was James as Chair of a large corporation that had certain IP (Intellectual Property rights) which a number of major corporations would be attracted to buy, acquire or whatever to grow their IT and Artificial Intelligence divisions into significant profit centres. His entourage was dominated and his personality very empowering. A man of substance who would not suffer fools.
Marina, his wife was hovering and listened to all he said. She was his most trusted ally. Well dressed, conservative and sophisticated. Tall being around 5 ft 10 ins and lithe figure. Likely to be of Spanish origin, but she did speak with a South American accent. Maybe ten years younger than her husband, but she was clearly very intelligent and knowledgeable from what reactions she gave to Charles as the three conversed in the shadow of James entourage.
Tomorrow was going to be very interesting to say the least.
After the call Charles spent the next three hours pouring over James firm's website, their takeover announcement on the NYSE and WHO's WHO on James and Marina.
Awesome was all Charles could think when he put together the word pictures with what he met in Las Vegas. Both MBA's with grown up kids at Uni. CV's the length of one's arm and based on their home, of substantial resources.
That First Meeting - Day One
Marina met Charles at reception and ushered him through ground floor security.
As requested by Marina , they travelled in silence up to the top floor offices.
Through a special door into a very old style oak lined office embellished with photos of James and Marina with some of the business world's well known identities. He was surprised when he saw one of the Wolf of Wall Street in a strange scene; Charles was determined to understand that at some later time.
James was standing as Charles entered.
A hand written piece of paper was handed to Charles, it said: I believe that my office has been bugged. It will be your job to discover if I am, what the quality of the bugs will be and how we can block them every now and then without the listeners and maybe the viewers being alerted. I need to find out who and if any of my staff are involved. I don't care about the criminality of what is happening or what you guys do to deal with that for me and Marina. Just nod if you are in agreement with this role.
Charles extended his hand out to James, nodded and thanked him for seeing him after their meeting in Las Vegas. The conversation was totally social afterwards directed at a meeting in Las Vegas that was clipped.
Marina escorted Charles out and gave him the phone number of a secure mobile. Either of them would give Charles a call and negotiate what was required and Charles firm's fees and charges. This would happen later in the day.
The first phone call was around 9.00am from a coffee shop about a mile from their office. The second came at 10.00am and agreed the fee structure, the matters to be followed up today and priorities. The third was to give access codes to remote sensors and computer systems. The fourth from Marina was personal, warning that if James was correct few people could be trusted and that if Charles was identified as being involved in surveillance he may need personal security for him and his team members; there would be few limits to the ends they may go including sexual and other forms of blackmail. The stakes here were huge.
The Project Starts - Day One
