Chapter 2
The Thursday deadline belonged to Mercer & Vale Home.
Gideon’s father, Daniel Mercer, had founded the company forty-two years earlier as a small custom furniture workshop. By the time he died six years ago, it had become a profitable regional manufacturer and retailer with twenty-three stores, two factories, and nearly sixteen hundred employees.
Ownership was still concentrated in the family.
Gideon owned thirty-four percent.
Evelyn owned twenty-seven.
Petra owned nineteen.
A management employee trust and several longtime executives collectively held the remaining twenty percent.
Gideon was chief executive officer.
Petra ran Petra Mercer Design, a separate interior-design company that supplied occasional projects to Mercer & Vale but was not a subsidiary.
Evelyn had never worked daily operations.
That did not stop her from acting like Mercer & Vale remained an extension of the family dining room.
For five months, a national home-furnishings group called Carroway Living had been negotiating to acquire substantially all of Mercer & Vale.
Offer:
$112 million enterprise value, subject to debt, working-capital adjustments, due diligence, and final shareholder approval.
The deal required seventy-five percent approval because it involved a sale of substantially all operating assets.
Evelyn and Petra strongly supported it.
Gideon did not.
Not because he believed the company should remain family-owned forever.
Because the original Carroway proposal undervalued Mercer & Vale’s factory real estate and required closure of the Ohio production plant within eighteen months.
Nine hundred jobs were tied directly or indirectly to that facility.
Gideon wanted an independent property appraisal and a negotiated employment-transition package before voting.
Evelyn called him sentimental.
Petra called him arrogant.
Carroway’s exclusivity period expired Thursday.
If there was no signed definitive agreement by then, the buyer could walk.
That alone created pressure.
Then Gideon’s corporate attorney, Rebecca Sloan, uncovered something he had never been told.
Evelyn had borrowed $7.8 million four years earlier to purchase shares from Daniel’s surviving brother.
Collateral:
Most of Evelyn’s Mercer & Vale stock.
The loan matured in six weeks.
If the Carroway sale closed, Evelyn could repay it easily from sale proceeds.
If the deal failed, she still had options.
Refinance.
Sell part of her shares.
Sell other investments.
Bring in another lender.
She would not become poor.
But she might lose the voting influence she had spent years consolidating.
Petra’s motive was different.
Carroway had issued an unsigned side letter contemplating acquisition of Petra Mercer Design for up to $4.2 million after the Mercer & Vale transaction closed.
Gideon had never seen it.
Rebecca looked at him.
“Was Petra’s firm included in the strategic review?”
“No.”
“Did the board approve a related-party discussion?”
“No.”
“Did she disclose this to the special committee?”
“Apparently not.”
Petra’s company carried approximately $1.3 million in bank and equipment debt.
Again:
Not ruin.
But a $4.2 million exit would solve most of it and leave her with substantial cash.
Gideon sat back.
“So Thursday matters to both of them.”
“Yes.”
Rebecca glanced toward the police evidence list.
“And apparently your mother had an envelope ready for you if you refused.”
Gideon looked at the words again.
May you like
IF HE REFUSES THURSDAY.
Whatever was inside had been prepared before Petra hit Linnea at dinner.
