Word: mergers
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Dates: during 1980-1989
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...attention of First Chicago (1983 assets: $36.3 billion), meanwhile, clearly worries Continental. While a merger of the competitors would create America's fourth-largest bank, Continental President David Taylor fears that perhaps a third of his 12,000 employees would lose their jobs because of the resulting duplication of services. Both to head off First Chicago and to open the door to banks like New York-based Chemical, Continental attorneys last week were helping to draft legis lation that would permit a takeover by an out-of-state U.S. bank. Current Illinois law limits potential buyers to institu tions...
...talk of a merger immediately sparked speculation about possible buyers. Analysts say they range from First Chicago, Continental's neighbor, to foreign banks whose operations would complement rather than compete with Continental's business. Examples: Barclay's of England and West Germany's Deutsche Bank. Taylor ruled out a sale to any firm outside banking...
...prospective acquisitions routinely requires twelve-hour days. Then, when the bidding starts, the bankers have to be ready to sacrifice their personal lives to the deal. As a result, almost all the top mergermakers are in their 30s or 40s. Jay Higgins, 38, the head of Salomon Brothers' merger department, spent six months working twelve hours a day nearly seven days a week to help Gulf Oil fend off a hostile takeover by a group of investors led by T. Boone Pickens' Mesa Petroleum. The payoff came when Gulf merged with Socal. "Don't get me wrong...
Despite their derring-do, dealmakers are little known outside financial circles. One reason is their penchant for secrecy. If word of a prospective merger gets out prematurely, it can drive up the price of the target company or invite competing offers. At Merrill Lynch Capital Markets, the investment banking arm of the big brokerage house, phones are swept for eavesdropping equipment and trash is routinely shredded. The staff is trained not to talk in elevators or on public transportation, and code names are used when a deal is in progress. Explains Ken Miller, 41, who heads the 35-person department...
...rewards of mergermaking remain enormous. The fees for a completed deal can run as much as 1.5% of the merger price, and are paid regardless of whether a company's takeover battle plan is successful, or even how much work the banker does. Gulf will pay Merrill Lynch and Salomon Brothers $46 million in fees when it is bought by Socal. In the Getty-Texaco merger, Goldman Sachs, representing Getty, did most of the work and First Boston "just carried Texaco's baggage," according to one participant. Still, First Boston will receive $10 million from Texaco...