Excerpts: “Megadealer for the Rothschilds”

  • Midway through the afternoon of Sept. 26, Robert S. Pirie, president of Rothschild Inc., waits anxiously in the salmon-colored dining room opposite his office at 1 Rockefeller Plaza. The dishes have been cleared away but the banker, having lunched on turbot quenelles, partridge and tarte tatin, washed down with the house wine (Chateau Lafite-Rothschild ’79), remains at the table, sipping claret and puffing on his third Davidoff cigar of the last hour.
  • A hulking figure with an unruly gray mane, Pirie is expecting a telephone call from Robert Maxwell, the much-feared British media magnate. During the last two months, the 54-year-old Pirie has been serving as chief tactician in Maxwell’s offensive against Macmillan Inc., the publishing giant. It is the second major battle in the Briton’s campaign to establish a strategic presence in the United States. Thus far, to his chagrin, Maxwell has been thwarted.
  • Robert M. Bass, the Texas financier, put Macmillan in play last May, bidding up the stock from $64 to $75 a share. Encouraged by Pirie, Maxwell entered the fray with a tender offer of $80 a share, whereupon Macmillan’s chairman, Edward P. Evans, sought refuge with Kohlberg, Kravis, Roberts & Company, the leveraged buyout specialists.
  • The Macmillan takeover is critical to Maxwell’s standing as a world-class mogul. The deal is equally crucial to Pirie and to his employers, the Rothschild family, who yearn for a prominent foothold in Wall Street. If Maxwell succeeds in capturing the publishing company, the Rothschilds’ American investment subsidiary stands to earn $12 million in advisory fees; should he fail, the fee will be $500,000.
  • Seven years ago, at the onset of the frantic restructuring of American industry, the French and British Rothschild cousins determined to rectify their mistake. They appointed Pirie, a truculent New York takeover lawyer, as their agent. His mandate: to build a powerful investment bank that would help the family reassert its dominant role in international finance.
  • Says David de Rothschild, head of the Rothschild bank in Paris, “Bob Pirie is a man with green fingers who knows how to make money.”
  • Starting with the Rothschild name – but little of their capital – Pirie has had to rely on his particular blend of social cachet and Street smarts. Focusing on the lushly profitable field of mergers and acquisitions just as the competition and the magnitude of deals and fees have reached unprecedented levels, the lawyer-turned-investment banker has attracted a clientele of foreign predators, principally British. The most voracious: Sir James Goldsmith, Sir Gordon White of Hanson Trust and Maxwell. Pirie has not yet pushed Rothschild Inc. into the top tier of investment banks, but the family’s name is now visible in Wall Street.
  • He [Evelyn] and Guy descended on New Court’s Manhattan offices, ousted the top American managers and changed the name of the firm to Rothschild Inc. To run their American investment bank, they turned to Robert S Pirie, the partner who handled the Rothschild account at Skadden, Arps, Slate, Meagher & Flom, one of the most contentious law firms in the field of mergers and acquisitions. There was precedent for such a move. Wall Street lawyers were jumping ship for the investment banking firms where the chance to steer a deal directly and make a name and a fortune for oneself were infinitely greater.
  • “As a Skadden lawyer, you bust your chops,” says Joseph Flom, Pirie’s legal mentor. “As head of Rothschild, Bob would be a guru.” Pirie’s militant reputation impressed the Rothschilds and, as arbiters of sybaritic taste, they also warmed to his princely life style. An heir to the Chicago Carson Pirie Scott department-store fortune, and a nephew of Adlai Stevenson, he was educated at Hotchkiss and at Harvard College and Law School. His Manhattan hangout during the week is the Old New York-ish Brook Club.
  • On weekends, Pirie retreats to his 100-acre estate north of Boston. His wife, Deirdre, a noted horsewoman, breeds thoroughbreds, a century-old Rothschild passion. The Piries have been guests of the royal family at Windsor Castle. Pirie’s forte is collecting rare books, with a particular emphasis on 16th- and 17th-century literature.
  • “One weakness of Rothschild Inc.,” says James Goldsmith, “is that it doesn’t have access to major pools of money.” With only $40 million in capital, Pirie made a tactical decision: to offer clients advice only. Clients must turn to other sources for financing.
  • Pirie’s secretary hurries into the office to announce that K.K.R.’s Henry Kravis, the financier whom Wall Street has dubbed the new J. P. Morgan, is on the phone. The strained voice coming through the squawk box concedes Macmillan to his opponents. Maxwell is ebullient. “Cease firing,” he roars. “K.K.R. has hoisted the white flag. The titanic struggle has been resolved.” Pirie’s secretary reappears. Sir Gordon White is calling from his car in London to offer congratulations before he meets Jimmy Goldsmith for dinner. Pirie is glowing. He has pushed the Rothschilds one step closer to the promised land of M&A

Source: New York Times