Royal

"On Smith's advice, Munk put in a bid. When it turned out to be close to but lower than Exxon’s, who came in at about $60 million, Munk withdrew. But then Exxon backed off and departed. Munk lowballed with a bid of US$31 million with a sweetener: Texaco would get half of any proceeds should gold go over US$385 an ounce, topping out at US$9 million. Texaco took Munk’s offer. The next step was to finance the deal. Munk’s recent feat of paying off the Royal’s $100-million Camflo debt gave him new credibility. The Continental Bank Company gave Munk an equity loan of US$31 million. With the funds already in hand, Barrick closed the Mercur deal in June 1985."

"There was therefore no misunderstanding on your part of the essential fact of the situation, which was that Royal would have cheerfully gone ahead with the idea, to the great detriment of the interests of existing shareholders, if other considerations had not caused him to drop it. It was and remains a thoroughly upsetting incident, not only in itself, but in its wider implications. If you prefer to ignore realities and live in an imaginary world, you are free to do so, but it seems to me that one should learn something from ex- perience. Among these things are that Royal, while a likeable person with unusual abilities, has a positively Rooseveltian delight in treating his po- sition as an amusing personal hobby. For him business is one exciting ad- venture after another, and he experiments, improvises and goes off at any tangent that occurs to him. The effect of this on the fortunes of his share- holders is to him purely incidental, and he has not the slightest hesitation in sacrificing them to the passing whim. No one has had more experience of this than yourself."