Matthias D. Falkenrath was one of the first who arrived in the conference room, and he silently waited for the meeting to begin. As a House Director he was outranked by the CEO and the Vice Presidents, yet those positions constantly engaged in political activity, meaning that he was by far more knowledgeable and qualified to address economic and market questions which would be raised by the former IND team. Persuading the so-called "Accountant" of Interspace's delegation would almost certainly secure a deal. The Rheinlander gently cleared his throat before responding to Mr. Jethro's proposal.
"Mr Jethro while you raise interesting points and propose a deal with lots of merits, I will have to point out some discrepancies.
The IND stock price is in decline, yet the fall started not after the IC purchase, but a year earlier with this huge PR disaster. The Board is interested in hearing your opinion about this matter and how a Presidency by you would avert similar incidents."
After he completed his question, the Director clicked on a document which started loading on the holographic stream. While waiting, Matthias examined his papers one more time while he unconsciously played with his marriage ring. His husband hadn't accompanied him in Liberty, instead he remained in Rheinland.
"This is the Wall Street Station with all the statistics and revenues of the last three quarters. IND formally rents a number of floors and docking bays of the station. Thus we would like you to clarify your stance and plans surrounding Wall Street."
"Mr. Faulkenrath, you bring up points worth examining in more detail. As you know, I had left IND for some time before that incident took place. I think it is one of the reasons my colleagues approached me about leading this venture. Under my tenure as President of IND, and in fact under that of my predecessors, IND's reputation was what it needed to be. While not sterling, it was on par with other corporations in Sirius. There is no company who hasn't fallen on the wrong side of some government regulation or other. That said, I am quite concerned by the content of the video. I saw it when it was publicized, and it shocked me. Clearly, this was not a "commercial" for IND, but instead, it was unsourced propaganda by the Lane Hackers. Sources within the LPI told me they were approached by the creator of this piece of nonsense to view the source material and it was found to be doctored and unreliable. My shock is not that something like this would be done by the Lane Hackers, it is par for the course for them, as I am sure you at IC well know. What was shocking was the lack of PR response from the company. During my days coming up in IND, we knew that stock prices moved not so much on what is actually happening, but what is thought to be happening. The lack of response here was deadly, and you are right, the stock fall started here. But you have not been able to turn it around Mr. Faulenrath, it has continued its downward trend, quite hard. I have to say, I am starting to feel like my retirement funds will not be sufficient if the stock continues this way. One of the reasons I accepted the board's appointment. Public relations is the core of a stable stock price and a thriving company. But IND is at the moment a tarnished brand, and it will take a lot of work to bring it back to its former glory, and success is not guaranteed. The rehabilitation of the IND brand is a risky venture. But we are willing to relieve IC of that risk. We both know at the moment that IND's stock price, while continuously falling is being artificially propped up by its stock of Renzu and LPI. While both of these companies do well, IND does not, thus, the disaster that IND has become in terms of debt to equity and assets is being masked on the market. As soon as IND is divested of LPI and Renzu holdings, its stock price will plummet. This deal is the safe move for IC and their stock holders. By taking on the profitable portions of IND's holdings and divesting its IND stock, IC's stock price will go up, it's debt to equity ratio will go down and it will be relieved of a volatile piece of its portfolio. The analysts will think this was a dream deal for IC. By taking over IC's risk in IND, the former board will go back to doing what it knows best, running the IND. Without the drain of Renzu, the management can focus all its efforts on IND. All of the board have significant parts of their portfolio tied up in IND stock, and our personal financial security is tied to IND. We have the most motivation to make this work. We are in the best position to put everything we have toward making it work, and should we be successful, we will reap the rewards. This is the game, and we are giving you a very safe, very profitable way to mitigate all of your risk in IND. I would imagine the immediate result of this deal would be a 7-10% jump in IC stock price."
Mr. Jethro took a sip of water and continued.
"As to Wall Street. Grey Sector and our offices on Wall Street are the face of the company. It is important for us that the face remain clean and presentable to the public. We would never allow a situation where Kusari law enforcement had a problem with our actions on Wall Street and we would never allow it to affect the lessor company, IC. I would be very happy to sign a rider to the current long-term lease for our holdings on Wall Street stating that should any problems arise with law enforcement in regards to Wall Street, they shall not be the responsibility of IC and if they are not able to be resolved between the Kusari authorities and IND, that it could be cause for cancellation of the lease agreement between IND and IC for Wall Street. We don't wish to open IC to any liability in regards to IND, the whole point of this deal is to relieve any liability and legal connection between IND and IC."
He took another sip.
"Mr. Faulkenrath, I hope this answers your concerns."
Right after Mr. Jethro finished his small presentation Ana, not wanting to interrupt him while he was talking, turned towards Alan and passed him the folder that contained numerous projects which were supposed to take place in Hiroshima system on Renzu Shipyards. On the other side Mr. Falkenrath was going through his papers before getting back to Mr. Jethro's presentation.
While Alan was briefly going through the files from the folder, other Directors were just silent. For example Mr. Dean was just uncomfortably sitting in his chair and sipping his exotic coffee from time to time, Mr. Kelly was frowned for some reason giving impression that he didn't want to be on this meeting yet still had to show up because of Mr. Johnson. A few moments after Alan finished reading. " Thank you Ana. Mr. Jethro, thank you for your presentation. You see after that commercial or propaganda created by Hackers IND's stocks and reputation went downhill and I it was hard getting IND back to it's feet. Though I must admit that your offer Mr. Jethro is very appealing to my and I believe my colleagues here. Giving out IND and getting a full control over Renzu could be very beneficial to both you and us, yet I would like to hear your full offer Mr. Jethro. " Alan leaned back in his chair and nodded to Mr. Jethro.
"Mr. Johnson, our offer is fairly simple. We offer a straight stock for stock swap. IND will transfer our stock in both Renzu and LPI to Interspace Commerce in whole, and in return, IC will transfer their 51% stake in IND to our board of Directors. IND currently holds 24% of the stock in LPI, this would increase your stake to 49% which would give you control of all shares of LPI outside of the 51% held by the government of House Liberty. Currently, Interspace holds, if I am correct, 45% of all Renzu stock. IND owns 40%. This would give you 85% of Renzu's stock, the remaining 15% being held by the estate of Renzu's founder in silent receivership. In this deal, you would also get IND's interests in Renzu Shipyards. With all the projects you have in the works, the profits for the shipyards themselves will end up being quite profitable for IC. As a stipulation in the deal, IND will retain it's 99-year lease on its space at Wall Street."
A hearty laughter erupted. As Mr. Jetro finished his statement. It was the Chairman of the Board of Directors, Jason Kelly, who had been sitting quietly in the background as observer. His Position as non-executive Chairman usually kept him in the role of observer and representative of the various stakeholders of Interspace Commerce to the Board of Directors.
"Mr. Jetro, forgive me, but are you trying to propose to pay Interspace Commerce with stocks they already own? Last time I checked, IND and all its subsidaries, that includes the 40% of Renzu and the stocks on LPI, you were talking about, are owned by Interspace Commerce."
"Mr. Kelly, I am glad you find this humorous, though, when you say IC "owns" IND, that is a bit of an over-simplification don't you think? I would think someone who has reached your position would understand the complexities of a transaction like this. Interspace Commerce owns 51% of IND stock, and the group I represent owns 49% of the stock. Which means all of the investments we have been talking about are owned, virtually half and half by value between IC and the group I represent. So no, we are not trying to pay you with something you already own."
With nearly 70 years of age, Chairman Kelly, was not one to be trifled games with. He had seen and lead some very successful companies before retiring, until being called to save Interspace Commerce from bankruptcy. And his proof of success stood in front of him, asking for freebies because once again, nobody thought it possible to keep track of all the intricate deals and stock-shares and – more importantly – who in the end called the shots.
“It actually is that simple. It’s completely irrelevant whether the stocks are controlled by Interspace directly or via a IND. We exercise the share voting rights trough both, due to our majority of stock on IND. Every position IND represents on any stockholder’s meeting of the Renzu Corporation or the Liberty Police is, essentially, the one Interspace Commerce deems suitable. So whether or not the board controls the stocks and it’s associated rights directly or via a shell is in essence the same.
In the stock market, Mr Jetro, minorities do simply not matter.”
"Mr. Kelly. I am not discussing voting rights. Our 49% minority share still has the same monetary value per share as your 51% share right?
Your suggestion that minorities don't matter is absurd. Minorities matter in as much as they are worth money. And money is what runs the stock market, and everything else for that matter. Not voting rights. I wasn't prepared to give a presentation on the way a companies assets work, I assumed everyone at the table would have prior knowledge of it. If you would like though I would be happy to put something together for you quickly."
"Mr Jetro we're not here to give you a introduction in economics and business sciences. If you lack those qualifications, I fail to see why you're even here.”
"Did you just give me the adult version of "no U"? Sir, I was the CEO and managing director of Renzu, I was director of operations, Vice President and President of IND. I am not sure what you think you have to teach me. I am here to try to make a deal. If gaining twice as much profit from Renzu and LPI is not something that interests Interspace Commerce then I am not really sure why we are here. Though, I am not exactly sure, what is your role with IC, and your role within these negotiations? Who am I talking to here? Who is in charge?"