Word: icahn
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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...
...moment's notice. Among them: insurance companies and savings and loan associations looking for a high- paying place to put their money. Before long, Milken's bustling office in Beverly Hills became the financial fueling stop for takeover artists on their way to a raid. Milken helped Carl Icahn take over TWA, backed T. Boone Pickens' run at Gulf and supported Ted Turner's successful bid for MGM/UA, among many other deals...