Free Last Man Standing by Duff Mcdonald Page A

nobody worked as hard as Jamie,” recalls McDermott, Weill’s longtime communications chief. Not that he was without a slower gear. In Commercial Credit’s New York office on 55th Street between Park and Madison Avenues, when Weill packed his briefcase and headed home for the day, only a few minutes passed before the invariable, “Jamie says drinks at 5:00 P.M .” Those on hand, secretaries included, piled into the library and had a drink.
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    In the 1960s, Shanghai-born Gerry Tsai was one of the most dynamic and powerful people on Wall Street, helping build the Fidelity Fund into a powerhouse. One of the common, if coarse, refrains among traders of that era was, “What’s the Chink buying?” Some 20 years later, the point was inverted, and it provided Weill and Dimon with their first big strike outside Baltimore. Tsai was a buyer no more, but a seller.
    In the late 1980s, Tsai, like Weill, was on his second career. He had spent the previous several years assembling a motley collection of companiesinto the shell of the old American Can Company. After selling the can business, he moved into retail (purchasing the likes of Finger-hut’s mail-order business and Musicland/Sam Goody record stores) as well as finance (A.L. Williams insurance and the brokerage house Smith Barney, Harris Upham & Co.). He’d lately renamed the whole operation Primerica, and had been considering trying to do what Weill had set his sights on: assembling a financial services conglomerate.
    Tsai’s timing could not have been worse. He’d bought Smith Barney at the top of the market, in May 1987, for $750 million, and had leveraged Primerica to the hilt in the process. With the sharp drop-off in Wall Street business, the brokerage’s capital-intensive business was threatening to take all of Primerica down with it.
    It was the kind of deal Weill couldn’t resist. Just like Hayden Stone, Smith Barney was a venerable Wall Street name that had stumbled, providing him with an opportunity to pick up a top brand at a discount. Another Chinese-American, John Hsu, Commercial Credit’s chief investment officer, made the first inroads with Tsai. Hsu made it clear that not only was Weill interested in Smith Barney; he might even be prepared to take on all of Primerica. Tsai initially demurred. But Primerica continued to struggle, and he hired Lazard Frères to explore ways to raise money, including the possible sale of the company itself.
    Shortly thereafter, a package titled “Greenwich” arrived on Weill’s desk from the bankers at Lazard. Named for the Connecticut town where Primerica was based, it included the company’s complete financials. Weill forwarded a copy to Dimon in Baltimore and told him to read it on the train to New York. Sandy Weill was in the hunt again, and Jamie Dimon was right there beside him.
    Over the next seven months, Dimon dug into Primerica’s businesses and financials until he was certain he understood every aspect of the exceedingly complex company. “Numbers leaped off the page and told Jamie whole stories,” recalls Mary McDermott. And there were a lot of stories to tell. Although Dimon remained chief financial officer of Commercial Credit, he largely ceded the running of that company to Lipp and Willumstad while he digested Primerica’s books.
    The deal nearly came apart when Dimon discovered some $60 millionin severance agreements for Primerica’s executives in the event of a sale. Further due diligence revealed that amount to be $90 million. After raging about the excessiveness of it all, Weill engaged in a startling display of hypocrisy by agreeing to the majority of the payouts when Tsai threw in a $20 million private jet, a Gulfstream G4, as part of the sale.
    Dimon eventually decided that a fair price was one share of Commercial Credit stock and $7 in cash for each share of Primerica, giving the deal a value of $1.7 billion. After a flurry of further negotiations and board presentations, the sale