Word: mergers
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When executives discuss a corporate merger, they become as circumspect as Swiss bankers. So it went with the merger between Allied and Signal, announced last week. Edward Hennessy Jr., Allied's chairman, along with Forrest Shumway and Michael Dingman, Signal's chairman and president, met March 5 at Marriott's Camelback Inn, a plush Scottsdale, Ariz., resort with two 18-hole golf courses, two swimming pools and ten tennis courts. Hennessy and Dingman registered under the last name of Dingman's secretary. Although the executives are fond of sports, they seldom left their rooms. When discussing the firms, they called...
...After brief consideration, they decided that it would be a mistake to break up Hughes. Says Dingman: "It would make no sense. Like a symphony, if you sold off the violin section, it would not perform as well." At that point, the talks shifted to a possible Allied-Signal merger. At meetings in La Jolla, Calif., and Morristown, N.J., the deal came together...
...merger unites two companies with similar histories. Both Allied and Signal have been fueling growth through a string of acquisitions. Allied's sales have more than doubled since Hennessy became chief executive in 1979. He had previously worked for two celebrated conglomerate builders, Harry Gray at United Technologies and Harold Geneen at ITT. Geneen sent his former deputy a congratulatory telegram last week saying "Great work." During his tenure at Allied, Hennessy acquired nearly 35 companies. His most dramatic coup came after a long and nasty takeover battle: the 1982 purchase of Bendix, an aerospace and automotive-parts manufacturer...
...question raised after any merger is how will top executives of the new firm work together. When Allied took over Bendix, William Agee, the Bendix chairman, was named Allied president. Alonzo McDonald, Agee's deputy, remained president of the Bendix subsidiary. A few days after shareholders approved the merger, both men resigned. Shumway, though, points out that Hennessy, Dingman and he have long known one another and that the merger was a friendly one. Nonetheless, he does not rule out the possibility of dissension. Says he: "It's very tough to say whether we'll have serious conflicts, though...
...Uniroyal wrangle, company officers managed to fend off Icahn by attracting a friendly merger offer from a Wall Street investment firm, Clayton & Dubilier. The firm, which plans to raise $748 million for the deal, offered $22 a share, vs. Icahn's hostile bid of $18. Icahn, who amassed most of his 9% Uniroyal stake in April, withdrew his offer, promising not to increase his holdings for six months. It is not the first time Icahn has been foiled. He made an unsuccessful pass at Phillips Petroleum two months ago, and in the past has been fended off in raids...