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“One day you’ll meet someone that will make you want to change your entire life. I only hope you don’t miss it when it happens.”
His mother was a hopeless romantic, and her words had him shaking his head ruefully. “Sure, Ma. I’ll keep an open mind. Tell Yaya I miss her, OK? I’ll talk to you on the weekend.”
CHAPTER7
Nik leaned back in his chair, reviewing the spreadsheets displayed on the monitors in front of him. He had exported the prior year’s financial data and was using custom tools to analyze where the peaks and valleys in revenues occurred, trying to find predictable patterns. He would then compare it to the previous several years. Some of the data was garbage. The pandemic had forced the casinos in BC to close for an extended period, completely skewing two years’ worth of data.
Then the money laundering scandal had broken, and the regulator had imposed new rules to prevent future money laundering. That was easy to pick up on his graphs. In truth, the past few years looked like a mountain range, with tall spiky peaks followed by bottomless valleys. Coastal owned multiple casinos in BC, but they had all been affected by the same issues. Even though the money laundering had been centred at Harbourview, the changes to the rules across the province and the damage to the company’s reputation had driven down revenues across the board. The fact that Harbourview accounted for 50 percent of Coastal’s revenues didn’t help. With numbers like these, buying Coastal even at bargain basement pricing might not pay off for WYCK. Nik would have recommended WYCK walk away from the deal, until he found something intriguing in the final quarter of the previous year.
Starting in early September, against all odds, revenues had started climbing. Under any other circumstances, that would be good news. Somehow the remaining executives and casino leadership had found a way to not only stop the bleeding but to crawl towards a recovery. The problem was, the analysts who were speculating that Coastal would beat revenue projections were right. And once they announced their earnings, there would be a feeding frenzy in the markets. Coastal was on track to beat their expected earnings by more than 25 percent. Based on that result alone, Coastal was in a strong position. Even more interesting was what Nik found when he dug deeper. The company fundamentals were equally encouraging.
Coastal had lost the financing for a large renovation and expansion at Harbourview earlier in the year, at the same time the Ontario government cancelled their partnership. The cancelled credit had left them with surprisingly low debt levels at a time when most casinos were overleveraged. It was starting to look like the fallout from the money laundering investigation might have saved Coastal from their own ambitions. Instead of being burdened by debt, the company had been able to remain profitable even on reduced revenues. Now that revenues were climbing again, their profit margins were some of the best Nik had ever seen in the casino industry. These were the kind of numbers that WYCK was looking for, but they needed to act fast. If outside analysts found out how much Coastal had recovered, share prices would skyrocket.
Nik tore his attention from his analysis when his phone rang. Call display showedCharles.
“Nik here.”
“How’s Vancouver, buddy?”
“Not as good as Greece,” Nik grumbled. He wasn’t going to let his partner off the hook without a little teasing.
Charles laughed, as Nik intended. “Greece will still be there when you’re done. This opportunity might not. Find anything yet?” The question was hopeful, but Nik sensed a hint of concern behind it.
Nik filled Charles in on his observations so far. “I expect the share price to spike once the earnings report is released. We need to do more research, but if we’re going to do a deal, we need to move fast,” he concluded. His gut told him this was an opportunity to make millions, possibly even billions over the course of the next decade. Combined with their casino assets in Ontario, it would create the biggest casino company in the country. The resulting company would then be big enough to compete with some of the biggest players in the world. Nik had pushed WYCK to move into casinos in the first place, but movement in Canada had been slow, while Charles and his other partners had been able to make bigger moves in other world markets. This would bring their Canadian investment in line with the rest of the company, proving him right about the potential of the market.
If WYCK could quietly buy more shares without driving up the price, they would be in a stronger position to negotiate a takeover. Those shares weren’t necessary—their ownership stake was big enough already—but every share they could buy at market was one less they would have to pay a premium for when the buyout went through.
“What resources do you need? Analysts? Auditors? We’ll make it happen.” Nik heard Charles shouting orders to someone in the background. Probably WYCK’s executive assistant, an unflappable woman named Margaret, who ran the office with military precision.
“She’s going to get tired of your crap and quit one of these days,” Nik warned.
Charles laughed. “Are you kidding? She won’t quit; she’ll execute a hostile takeover, and you’ll all be working for her one day. Trust me. I’m all bark, and if I step over the line, she’s not shy about telling me where to shove my attitude. My wife loves her. Says Margaret keeps me humble.”
“If you say so. All I know is, no one else wants to be responsible for you, so you need to keep her happy.” Nik caught sight of Jules walking swiftly down the hallway outside the office she had assigned him to. For all her small size, she exuded power and confidence, something he found irresistible. He still wanted to have dinner with her ... and maybe more. Definitely more.
Nik refocused on the task at hand. “I’ve got to talk to the CEO. I’ll bring in some of the local audit team we have on retainer here to start the review process, and I’ll expedite everything. Earnings have to be released by the end of the month, which means we have less than three weeks. I’ll call you.”
Nik ended the call and headed after Jules, catching sight of her as she turned the corner into her office. Today her long blonde hair was hanging down her back, and she wore another skirt suit that hugged every curve. Those suits were perfectly professional from the front, but from the back the fabric clung to her like a second skin—and had him aching to peel it off.
“I need to talk to you.” Nik leaned against the office doorframe, arms crossed over his chest.
Jules looked harried and distracted when she met his gaze. “Come in.” Her tone was wary, and Nik wondered again why he made her so nervous. Her grasp of the takeover process had impressed him, so that shouldn’t be upsetting her. It had to be something else. He’d figure it out.
Nik strolled across the room, noting the flush of colour high in Jules’s cheeks. He tried to decipher the cause, but she was nearly impossible to read. The little he knew about her came from one night when both of their inhibitions had been lowered from the alcohol, and the woman in front of him was a stranger. What was she hiding behind her poker face?
“I’ve been analyzing your numbers, and I have questions. Coastal has been recovering nicely over the past few months. Revenues are down from where they were a few years ago, when millions in dirty money were coming through, but even factoring for the loss of that money and the new restrictions, I’m seeing growth. What are you doing?”
This was the piece he needed to understand. He had access to revenue reports from Ontario casinos. They were experiencing expected revenue increases that reflected the return to normal operations after the end of pandemic restrictions, but Coastal’s growth percentages were higher. That shouldn’t be happening, considering the reputational damage of the past year, plus the stringent new restrictions the BC operators faced. If the revenue growth was a fluke and couldn’t be counted on to continue, that would affect his recommendation when negotiating the share buyout price. If there was a real strategy behind the growth, that would command a higher price, but it would pay off in the end.
Jules cocked her head to one side and gave him an appraising look. It felt like she was trying to measure how much she could trust him, and he started to bristle under her scrutiny. He was a majority shareholder; if she couldn’t trust him, he had to question if she was the right person to run the company. He’d opened his mouth to say as much when she began speaking.
“The scandal at Harbourview was all consuming, as I’m sure you have realized. The loss of our VP of operations meant that most of our attention was being directed at cleaning up Harbourview, and the other properties we own were left to their own devices. Not the best way to run a business, I admit, but considering where most of our revenues come from, we had few options. Harbourview was starting to slowly recover, with the return of a few big conventions helping considerably. When I sat down to review the monthly statements, though, I saw something interesting. Without any assistance from corporate, five of our smaller properties were seeing double-digit gains.”
Nik worked to control his excitement. Double-digit gains? Number spikes like that were the stuff private equity dreams were made of. “How did they manage that? Some seasonal thing? Can they replicate it?” A seasonal bump was always possible—and easily explained away—but Jules was shaking her head at him.
“I wondered the same thing, so I called them. The five property managers had called a meeting and brainstormed marketing ideas. They came up with several, and implemented a couple. One of them took off, at all five properties. When I heard that, I had them help us roll it out to every other Coastal property. It hasn’t failed yet. And the reason it doesn’t fail is that each program is tailored to the local community.”
In broad strokes, Jules explained a strategy that included partnering with local community groups, offering meeting rooms and food at discounted prices to get business in the door. Once in the door, the customer service teams took over and sold people on the amenities each property had available.
