Word: icahn
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Dates: during 1980-1989
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...stock market breaks through an important psychological barrier into uncharted territory. While professionals take the milestone in stride, many believe that the run-up marks the start of a third and major upsurge in the great bull market that began in 1982. -- Corporate Raider Carl Icahn gives up on his bid for USX. -- Defections plague a computer-industry alliance...
...most corporate managers, the very mention of Carl Icahn's name is enough to cause shudders. But USX Chairman David Roderick may be tougher than most. Last week, after a three-month battle to gain control of the largest U.S. steelmaker, Icahn abruptly gave up, outmaneuvered by Roderick. The corporate raider and TWA chairman had been unable to raise the $10.5 billion needed to capture the company. Says Joachim Schnabel, investment officer for the College Retirement Equities Fund, which holds more than 2 million USX shares: "You have to credit USX management for not caving...
...When Icahn first made an offer of $7.1 billion, at $31 a share, in October, Roderick resolved to save his company. The chairman knew that Icahn might sell off USX piece by piece, since the breakup value of the firm is estimated to be more than $61 a share, or $15.8 billion. USX announced that it would undertake a cost-cutting and restructuring program...
...though, it was a relatively simple ploy that dashed Icahn's hopes. USX had borrowed $3.4 billion last year under terms that allowed the lenders to call in their loans immediately if the company were taken over. At the end of December, Roderick cleverly decided to use up these funds to pay off other debts. If Icahn had gained control of USX, the banks could have demanded repayment. That in effect raised the cost of taking over the company from about $7.1 billion to $10.5 billion...
...that price, the USX takeover would have been the second most expensive in U.S. history, ranking behind only the $13.2 billion acquisition of Gulf Oil by Standard Oil of California in 1984. But Drexel Burnham Lambert, Icahn's investment bankers, apparently could not raise all the money needed. Some Wall Street observers speculated that Drexel Burnham's ability to finance takeovers has been somewhat hampered by the fact that it has been subpoenaed in the widening Securities and Exchange Commission investigation into illegal insider trading...