Predator's Ball by Connie Bruck
Author:Connie Bruck
Language: eng
Format: epub
Publisher: Simon & Schuster
IN THE junk-bond-takeover war, which began in earnest in early 1985 with Icahn’s raid on Phillips, Revlon was the crucial campaign. That was where the most impassioned corporate defenders were united against Milken’s onslaught; where they unloaded everything in the takeover defense arsenal; and where they fought down to the wire, committed to evading Perelman at all costs to the very last moment. What they lost sight of—particularly as Perelman, by the good grace of Milken, kept upping his all-cash bid—was that Perelman’s money was as good for the shareholders as anyone else’s. In the end, they sought so desperately to escape his clutches that they undid themselves.
To Bergerac and his advisers, and to the rest of the corporate establishment that watched with fear and trembling, the fight for Revlon was a rude introduction to a new world. All the brainpower, clout and class connections that Revlon summoned were no match for the raw financial might of Drexel. Michael Milken had become the great equalizer.
At the outset, it seemed to Revlon’s advisers, and to much of Wall Street, preposterous that Pantry Pride would prevail. For all the furor in Congress over Drexel and its junk-bond-financed takeovers, the facts were that by mid-1985 few had succeeded. In the most highly visible and emotion-charged bids—Icahn’s for Phillips and Pickens’ for Unocal—the companies had fended off the raiders. Triangle’s bid for National Can had succeeded, but that had not exactly started out hostile (National Can was in the midst of trying to do its own LBO, and its directors had said they would consider any higher price by another bidder).
Before Perelman made his bid for Revlon in August 1985, the single instance of a Drexel-backed deal that had started hostile and gone to completion was Coastal Corporation’s takeover of American Natural Resources Company (ANR), which had turned friendly after two weeks’ bitter struggle in April 1985. And ANR, an Oklahoma pipeline-manufacturing company, was not Revlon. As one Pantry Pride strategist recalled, “The attitude on the Street was, How could a major institution like Revlon be taken over by someone like this, a complete unknown—someone who’d made his wealth in cigars and licorice, not to mention with his wife’s money?”
Dennis Levine, the Drexel investment banker who represented Pantry Pride in the Revlon battle, recalled Martin Lipton’s attitude when the fight was just about to begin, in mid-August. Levine was in Lipton’s office at Wachtell, Lipton on another matter. Lipton had just been retained to represent Revlon, and Levine had mentioned that he would be advising Pantry Pride. “ ‘Don’t waste your time,’ Marty said. ‘Pantry Pride will never get Revlon.’ ”
Lipton brought more than the usual defense lawyer’s fervor to this deal. Over the course of the preceding year, Lipton—who had built his firm and his wealth on a takeover practice—had emerged as one of the most outspoken and vehement enemies of what he called the “two-tiered, bust-up junk-bond takeover.” “Two-tiered” referred to the fact that bids had featured a front end which paid
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