Rupert Murdoch perseveres
'So what does the world think of Rupe's latest shenanigans?' asked Laurie, knocking back his beer. We were in Australia, in fact in Sydney, so I worked out that the Rupe he was referring to must be Rupert Murdoch.
But which of his many shenanigans was Laurie interested in? Was it his spat with Time Warner in the American courts? The rumours that he was about to move the headquarters of Star TV from Hong Kong to Singapore, Malaysia or India before the Chinese takeover next year? The raids by tax inspectors in Israel? The moves to control the digital television gateway in the UK? His takeover of rugby football in the southern hemisphere?
The request for a world view was understandable. After all, Australia still feels a long way from anywhere. And Laurie is what I would term an unreconstructed financial journalist. Despite the growth of modern communications, he prefers to rely on primary sources for opinion and comment - however inadequate they might be.
We were in what seemed to be an unreconstructed pub, too. Above us was a thoroughly modern office block, sparkling in the extraordinary light that reflects off the harbour. It was a world which was inhabited by thoroughly modern investment bankers, accountants, lawyers and even, I suppose, investor relations officers.
But here, at street level, there was a long panelled room with a long mahogany bar and a ceiling decorated to reproduce the patina of ancient nicotine. This was not a place for sippers of Chardonnay or mineral water; or indeed for women. This was a place for serious drinkers.
'So do you think the markets will wear it?' asked Laurie. I realised that he was asking about the proposed convertible share issue by BSkyB, the European satellite broadcaster which is 40 per cent owned by Murdoch's News Corporation.
'It's a huge gamble,' I ventured. 'After all, he's betting the whole of his stake in a highly successful operation on his expansion plans in the Far East and the States.'
'Well, he is a gambler. And a good one at that,' came the reply. 'I mean in the early 90s he bet the whole of his business on satellite television and pulled it off, despite what the whingers were saying.'
'But in effect he's mortgaging his shares in the company in the hope that in five years time he will have done well enough to get them out of pawn,' I said. 'And what's wrong with that?' asked Laurie. 'You have to understand two things about Rupe,' he went on. 'First, he has an insatiable need for capital to fund his global vision. Second, he wants to keep control. This way he raises $2 bn from shareholders and, when things come good, he pays them off so his family stake is undiluted.'
I realised that even though he was officially a citizen of the US, Australians still regarded Murdoch as one of them: a free spirit with little respect for authority, taking on and beating the establishment wherever he set foot. He is, after all, the last Australian tycoon. Not many years ago, four of them bestrode the world. But the stars of Alan Bond, John Elliot and Kerry Packer have either fallen or dimmed. Rupe is still there.
'So why doesn't he go to the banks for money?' I asked. 'He tried that in the 80s and the bastards nearly took his company away. Where would the business be today if he'd lost control in a debt-for-equity swap?'
'He also tried to issue a new class of non-voting equity but the regulators threw it out,' I recalled. 'Yes but MCI took him up on it.' Laurie countered. 'They paid top dollar for what is, effectively, a non-voting stake.'
'Well, I don't know what the authorities will say. After all, equity is supposed to be about ownership and control,' I said lamely. 'I know what Rupe will say to the authorities,' came the response. 'And he's in the right business to do it. Governments and regulators are scared stiff of the media. Hearst knew it. Beverbrook knew it.'
'And Maxwell knew it,' I suggested, but Laurie ignored my remark. He was, after all, an unreconstructed financial journalist. He asserted that the stock markets were about speculation rather than investment and that a good tip was worth a thousand times any analyst's research.
I began to reflect that markets built on mining shares have different attitudes from those which are based on something other than questionable geologists' reports emanating from the back of beyond.
Earlier in the day, I had been talking to serious bankers about the listing of telecommunications companies and the demutualisation of insurers. It had all seemed perfectly normal. Now I was drinking in a parody of a pub and wondering if Laurie was winding me up.
Another beer might help me work it out. And if not, at least it might stop me caring.