Word: araskog
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While telecommunications experts were shocked by the magnitude of the proposal, it would merely be the latest in a string of major divestitures by ITT. Since he took charge of the company in 1979, Chairman Rand Araskog has spun off some 95 businesses worth about $4 billion. Meanwhile, he has channeled resources into such prized divisions as the Hartford insurance company and the Sheraton chain of 488 hotels and resorts. Says Herbert Goodfriend, a telecommunications analyst at Prudential-Bache: "Araskog is dismantling Harold Geneen's empire...
After taking over from Geneen in 1980, Chairman Rand Araskog tentatively began to shed some of the conglomerate's less profitable divisions; last week he announced that ITT was going on the corporate equivalent of a crash diet. In the coming months, it plans to sell more than a dozen subsidiaries with assets of $1.7 billion. That will be a 12% slash in the company's current assets of $14.1 billion. Officials disclosed only a partial list of the units for sale. They include Eason Oil, the Bobbs-Merrill publishing house and O.M. Scott & Sons, which makes Turf Builder lawn...
When Geneen finally turned over the chairmanship to Araskog in 1980, he kept a seat on the board of directors. Says Robert Sobel, author of ITT, a 1982 history of the company: "Araskog wanted to sell a lot of companies at the outset, but Geneen seemed to think that selling anything that he originally purchased represented a slap in the face." Some Wall Streeters believe it was not until Geneen left the board in May 1983 that Araskog, a West Point graduate who grew up on a Minnesota farm, could assume full command. The clearest signal that he was committed...
...Araskog shocked Wall Street in July by slashing ITT's quarterly dividends by 64%, from 69 cents to 25 cents per share. ITT's stock price, which reached 47 3/4 in 1983, was at 31 3/8 before last week's divestiture announcement. Investors seemed unimpressed by the plan, and the stock closed the week...
...back on a growth path, Araskog has launched a major offensive in the U.S. telecommunications and office-equipment markets. The company has long been a major supplier of sophisticated telecommunications gear in Western Europe but was effectively shut out of the American market until last year's breakup of AT&T. Now ITT hopes to sell an advanced switchboard, known as System 12, to some of the new regional Bell companies. However, it faces formidable competition from several firms, including AT&T, GTE and Northern Telecom. In the office-equipment field, ITT has come out with a personal computer...