Chapter 516: The Salomon Case Negotiations

The forty-seventh floor was much quieter than downstairs.

The thick carpet absorbed most of the footsteps, and on both sides of the dark wood paneling were independent offices, with employees holding documents occasionally hurrying past from the other end of the corridor.

Gutfreund led Satsuki all the way inward and finally stopped in front of a small private meeting room.

"Please come in."

Satsuki walked in.

The meeting room was not large, featuring a long table with five or six chairs placed on each side.

Hanging on the wall was an aerial photograph of New York Harbor, and outside the window, the Hudson River and the skyline of New Jersey on the opposite shore could be seen.

Several people on Salomon’s side were already sitting there—Satsuki recognized two of them: one was the Chief Financial Officer, and the other was a Senior Vice President in charge of fixed income business.

They were truly Salomon’s core top management.

On Saionji’s side, besides Satsuki and Frank, there were also two legal and risk management personnel temporarily transferred from the New York office.

Satsuki sat down on one side of the long table.

Gutfreund sat opposite.

The door of the meeting room was closed from the outside.

Gutfreund placed his hands crossed on the table and looked at Satsuki.

"So, Miss Saionji—can we begin?"

Satsuki nodded.

"Please go ahead."

Gutfreund was silent for a moment, as if organizing his words.

Then he spoke, his voice much steadier than it had been in the lobby just now.

"First, I want to make one thing clear."

"The problems facing Salomon Brothers right now are indeed serious."

"Clients are leaving, counterparties are tightening margins, the renewal rate of commercial paper continues to drop, and the credit lines given by banks are also shrinking."

His tone was calm, neither trying to cover up nor intentionally exaggerating.

"But the root cause of these problems is not a failure of Salomon’s business capabilities, nor has our asset suddenly become worthless."

"What has truly collapsed is trust."

Satsuki did not interrupt him, just listening quietly.

"Over the past thirty years, the position Salomon established in the fixed income and Treasury markets was never won by luck."

Gutfreund continued.

"What Salomon currently owns did not suddenly disappear because of a scandal."

"We still possess one of the strongest fixed income business teams in the world, remain one of the most important primary dealers in the U.S. Treasury market, and still control a massive institutional client network and global clearing and sales system."

"In the Asia market, Salomon remains one of the few bridges that can truly connect Eastern and Western capital."

He paused for a moment.

"They are all still here."

"It’s just that no one is willing to believe right now that they can continue to deliver value."

Satsuki picked up the water glass on the table and took a small sip.

"So what do you expect Saionji to do?"

"I hope Saionji will become the partner that allows the market to rebuild trust."

Gutfreund’s tone became more earnest.

"As long as a partner with sufficient capital strength, sufficient market credibility, and a willingness for long-term cooperation steps forward, many deteriorating factors have the opportunity to be quickly halted."

"Specifically—"

He signaled his assistant to distribute a document to everyone present.

"First, continue to fulfill our existing three-year cooperation agreement. Do not withdraw existing businesses and assets."

"Second, I hope both sides can further expand long-term cooperation. Whether in the U.S. market or the Asia market, Salomon is willing to provide deeper services for Saionji."

"Third—"

He paused.

"I hope Saionji can provide Salomon with long-term capital, and arrange backup credit support when necessary."

"The specific form can be discussed; it can be a direct capital injection or other more flexible arrangements."

Satsuki raised an eyebrow: "What else?"

Gutfreund smiled.

"I hope this rescue plan can maintain continuity in operations and management."

"Salomon needs adjustment and improvement, but it does not need to completely overturn and restart the entire existing management system because of a crisis."

After hearing this, Satsuki did not immediately express her stance.

Hmm, it seems this last point is the most important one...

She picked up the water glass on the table and took a sip.

"Then, Mr. Gutfreund—"

She put down the cup.

"What does Saionji get?"

Gutfreund’s eyes lit up.

This question was precisely what he had been waiting for.

"First, you will enter an investment bank that still possesses world-class business capabilities at a crisis price."

"Salomon’s current valuation is far below its true value, which is caused by market panic. Once the crisis passes, this part of the value will quickly return."

"Second, Saionji will have a truly long-term, deeply bound financial partner in the U.S. capital market."

"This is no longer an ordinary client relationship; Saionji will reach a strategic-level cooperation with Salomon Brothers."

Gutfreund’s tone became more infectious.

"Third, through this cooperation, Saionji can further expand the trading network between Asia and the United States, and even participate in some projects that in the past could only be accessed by the Wall Street core circle."

"Finally—"

He paused.

"Through a successful crisis rescue, Saionji will build a reputation and relationships in the U.S. capital market that no other investment can buy."

"You already demonstrated Saionji’s attitude to everyone downstairs just now."

"If this cooperation ultimately succeeds, then the next time any company in the U.S. needs capital and a reliable partner—"

Gutfreund looked at Satsuki.

"They will think of Saionji at the very first moment."

The meeting room fell silent again.

Satsuki’s body, which had originally leaned against the back of the chair, straightened up a bit.

I have to admit.

This guy really knows how to talk.

If the person sitting here were an ordinary investor who was already interested in Salomon and held a large amount of cash, after listening to this whole set of logic, they would probably have started seriously calculating how much money they should take out.

First explaining that Salomon’s truly valuable things have not disappeared, then explaining the crisis as a reversible credit problem; then telling investors that now is the best opportunity to enter this set of assets at a low price; and finally packaging an ordinary capital rescue into a ticket to enter the core network of U.S. capital.

From beginning to end, there wasn’t a single sentence of "please save me."

Even listening to the end would make people feel that it was Salomon giving you a rare opportunity.

Satsuki lowered her head again to look at the preliminary materials that had just been brought in on the table.

Above were the liquidity conditions, client changes, counterparty margin adjustments of Salomon in recent weeks, and a summary of correspondence records with regulatory authorities.

She flipped through a few pages.

The numbers weren’t pretty, but they weren’t rotten beyond retrieval either.

The commercial paper renewal rate was declining, but cash reserves could still hold out for a while.

Clients were leaving, but the core business team had not left on a large scale.

Regulatory pressure was heavy, but the Treasury and the Fed temporarily showed no intention of directly stripping Salomon of its primary dealer status.

In other words—

This company was indeed dangerous, but it wasn’t dead yet.

As long as the collapse of credit could be stopped, management and regulatory issues resolved, and sufficient capital buffer provided—

It could still be saved.

Satsuki raised her head.

"Mr. Gutfreund."

"Yes?"

"If according to what you say, this is indeed a very interesting transaction."

A smile appeared on Gutfreund’s face.

"However—"

Satsuki’s tone shifted.

"You want me to change from an ordinary client to a strategic partner truly participating in the rescue, so Saionji must also obtain the right to know matching this status."

Gutfreund’s smile shrank slightly.

"I cannot bet billions of dollars based on public statements and your unilateral word."

Satsuki smiled again.

"Therefore, I request to conduct a complete crisis due diligence on Salomon in the capacity of a ’potential strategic investor’ and ’crisis rescue partner.’"

"Under strict confidentiality arrangements, I need to view the internal information that truly determines Salomon’s life and death."

"The true situation of financing and liquidity, changes in major counterparties, all correspondence records with regulatory departments, the complete progress of internal investigations, the risk of continued exposure of Treasury violation incidents—"

She looked at Gutfreund.

"And any other important information sufficient to affect my judgment."

The meeting room fell silent for a few seconds.

Gutfreund did not answer immediately.

He leaned back in his chair and gently tapped the armrest twice with his fingers.

Satsuki did not rush him either.

During their first meeting, Satsuki had already taken the initiative to help him out, and her current request was even more of a reasonable demand raised based on the other party’s logic.

If they were unwilling to cooperate even with this, then Saionji would have to doubt whether their sincerity was true.

After a long while, Gutfreund finally spoke: "Miss Saionji, you should understand—a considerable portion of these materials involves Salomon’s most sensitive information."

"Of course I understand."

Satsuki nodded.

"That’s why I just said ’strict confidentiality arrangements.’"

"Specific confidentiality agreements, information barriers, access permissions, these can all be discussed."

"But the premise is—"

Her tone became firmer.

"I must see the real situation."

Gutfreund remained silent for a longer time.

Finally, he still slowly nodded.

"Alright."

"I agree to open the necessary materials and allow Saionji’s professional team to conduct a deeper investigation."

"The specific scope and confidentiality arrangements will be coordinated by the legal teams of both sides."

Satsuki smiled with satisfaction.

"Then that’s it."

Gutfreund pressed the internal telephone on the desk.

"Bring the first batch of core documents in."

In fact, Salomon had obviously prepared for potential capital negotiations long ago.

In less than twenty minutes, the first batch of materials was sent into the meeting room.

The quantity was not particularly large.

A few thick folders, plus the latest summary compiled by the internal finance department.

A truly complete due diligence could of course not be completed today, but for Satsuki, she now just wanted to first confirm the most core thing.

Whether Salomon was still salvageable.

The meeting room gradually quieted down.

Gutfreund did not continue selling.

Satsuki lowered her head to flip through the documents, and Frank sat beside her, occasionally pulling out a few pages to read separately.

Time passed bit by bit.

The expression on Satsuki’s face gradually changed.

At the very beginning, there was still some caution.

After seeing the later parts, she instead gradually relaxed.

There were many troubles.

Some places even looked harder to handle than the public news.

However—

It wasn’t rotten yet.

Satsuki flipped one of the internal summaries back to the first page.

Salomon’s truly dangerous place right now was still the chain reaction formed after the collapse of credit.

It was losing blood every day.

But the body was still alive, and the most important organs were still there.

As long as someone could first stop the bleeding, and then deal with the source that constantly kept the wounds splitting open, this company completely had the opportunity to pull through.

At least it was far from the point where it could only be dismantled and sold for parts.

Satsuki’s last remaining doubt in her heart gradually disappeared.

In original history, Buffett indeed pulled Salomon back from this crisis.

The world line had been messed up by her by now, so the past result could of course no longer be directly taken as the answer.

That’s why she had to confirm it personally.

Now it seemed—

At least this matter hadn’t changed.

It could be saved.

And it was worth saving.

As for how exactly to save it...

That was another matter for next.

Satsuki closed the final document.

She raised her head and looked at Gutfreund.

"Mr. Gutfreund."

"Yes?"

"Saionji confirms it will formally intervene in this crisis."

The expression on Gutfreund’s face visibly relaxed.

"From now on, I will send finance, legal, risk, and investment teams into Salomon to conduct further investigations."

"They will need more complete information and will re-evaluate solutions together with your people."

"On this basis, we will propose specific solutions as soon as possible."

Gutfreund this time had almost no hesitation.

"No problem."

He stood up and extended his hand toward Satsuki again.

"Then—happy cooperation, Miss Saionji."

Satsuki also stood up, looked up at Gutfreund, and shook his hand.

"Happy cooperation."

This handshake was completely different from the one downstairs.

Downstairs was done for the reporters to see.

And this time—

Was the beginning of cooperation in the true sense.

The smile on Gutfreund’s face had recovered that initial composure.

He had finally found a way of survival for Salomon.

At this very moment, the sunlight outside the window was blocked by something for a split second.

The light on the conference table dimmed.

A huge shadow slowly swept past the window, crossing the table, and also covered the hands shaken together by the two into it.

Satsuki subconsciously glanced out the window.

Not far away, two silver-gray towers still stood side by side in Lower Manhattan, their glass curtain walls reflecting the September afternoon sunlight.

The Twin Towers.

They had been standing there for many years.

Looking solid and massive, as if they would keep standing like this forever.