Word: coaling
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Dates: during 1960-1969
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...industrial complex-as LeMay demands-is too high. Such attacks would do little to hamper North Viet Nam's war effort, since most of its weapons and ammunition come from Red China and Russia. More important, goes the U.S. reasoning, if Ho Chi Minh's "hostage" industries-coal and iron mines, port facilities and Red River dams-were taken out, he might enlarge the war by sending his 450,000-man army south in an all-out move to take South Viet...
Anyway, M. A. Hanna is worth more dead than alive. Its stock had been selling for much less than its asset value, rose by more than 20% after the announcement that the assets will be distributed. Those assets will be worth even more when Consolidation Coal becomes a subsidiary of Continental Oil -thanks to a neat shuffle worked out by Love and McCollum, with at least Humphrey's blessing...
...holders of Consolidation Coal stock, which was selling for about $50 a share, will receive a total of $75 a share in the deal. First, the coal company will distribute its Chrysler holdings -which cost it only $45 million but are now worth $191 million-to Consolidation shareholders. In addition, Continental Oil will give the coal company shareholders $148 million in Continental stock, plus $460 million in cash against future coal production. It therefore appears on the surface that Continental will have to pay $608 million for the coal company. In fact, it will lay out only $48 million...
Continental w111 immediately pick up $100 million in working capital now held by the coal company; that will have the effect of reducing Continentals 148 million stock payout to only $48 million. As for the "future" payout of $460 million, that will be financed by a Wall Street syndicate or other big lenders so that the coal shareholders will get their cash immediately. Continental should be able to liquidate that loan within ten years from the coal company's earnings and depreciation. Meanwhile, it can deduct the annual interest on the loan-some $27 million-from its taxable income...
Double Windfall. If shareholders and the Justice Department approve, Continental Oil will thus upgrade its earnings, get $100 million to develop its coal and oil properties, also vastly expand a diversification move that since 1962 has led it into plastics and fertilizers. The shareholders of Consolidation Coal w111 get what amounts to 50% increase in the value of their investments. And the shareholders of M. A. Hanna will enjoy a double windfall because both Hanna and its holdings in Consolidation Coal have suddenly become more valuable. The dreams of Messrs Love, McCollum and Humphrey have produced one of those arrangements...