earnings of, 195
exchange offers and, 216–17, 224–225, 226, 229
Forstmann Little and, 219–28, 231
Frates group and, 195–96
gloomy predictions for, 234–35
lawsuits and, 211–13, 215, 226, 234
leaks in battle for, 219
lock-up option and, 225
management buyout plan for, 219–21, 225
operating profits of, 234
Pantry Pride merger with, 234
Perelman’s changes at, 239
Perelman’s debt service and dividend obligations and, 223
Perelman victory celebration and, 230–31
poison pill and, 216, 217, 224, 226
private placements and, 217–18, 223
stock of, 195, 211–12, 215–16, 218–21, 228–29, 232, 234
wealth distribution from bust-up of, 231–32
Revlon Group, Inc., 234, 237, 243
Revson, Charles, 195, 196, 234
Rexnord, 144
Richardson Battery Parts Division, 198, 208, 238
Richardson-Vicks, Inc., 221
Rider, 45
Rifkind, Simon, 196, 207–8, 216, 224, 228
Riklis, Meshulam, 35–39, 57, 67, 93, 119, 142, 168, 186, 273, 295, 327
Chinese paper used by, 38, 75, 120
exchange offers of, 75
Milken compared with, 37–38
National Can deal and, 132
SEC and, 37, 38
robber barons, 65, 66, 149, 245
Rocha, Rodrigo, 281–82, 283, 327
Rockefeller, Nelson A., 37
Rodeo Corporation, 132
Roderick, David, 188
Rohatyn, Felix, 101, 141, 196–97
junk-bond takeovers opposed by, 206–7
Revlon battle and, 206–7, 209, 210–11, 213, 221, 229
Rooney, Pace Group Inc., 202, 350
Rooney, Patrick, 202
Rorer, 232
Ross, Diana, 16
L. F. Rothschild, 48, 107, 114, 117
Rothschild family, 191
Royal Crown, 124
Rubin, Bob, 230
Rudnitsky, Howard, 270
Ryan, Arthur, 200
Rykman, Bill, 114
Sallis Securities Company, 132
F. L. Salomon, 153
Salomon Brothers, 30, 65, 95, 101, 142–43, 173, 214, 233, 250, 253, 326, 334
in “Bridge Club,” 250
Drexel compared with, 246, 247, 248, 251
margin rules and, 264
National Can and, 105, 123
Perelman and, 346–47
Phibro Corporation merged with, 248
Wickes and, 293–96
Salomon Inc., 145
Salsbury, Robert, 254–55
Sandler, Richard, 54, 81, 82, 93
Pacific Asset and, 278–79
Sandor, Richard, 251
Sassower, Goren and Schneider, 146
Sassower, Philip, 111, 113, 160–61
savings-and-loan associations (S&Ls), 12, 89, 91, 167, 269, 271–72, 277
savings banks, 207
Saxon Industries, 155–56, 160
Schaffenberger, George, 290
Schenley Industries, 132, 168
Scherer, F. M., 261–62, 263
Schnall, Melvin E. (M. Elliot Schnall), 150–53, 160, 187, 190
Schneider, James, 76
Schneider, Lawrence, 111, 113, 160–161
Schroder Capital Management, 279
Schroeder, Julian, 15, 68, 84, 337
Scott, Robert, 325
Scott and Fetzer, 118, 343
Sea-Containers, 305
securities:
delivery system for, 25–26
shorting of, 52
Securities Act (1933), Section 3(a)9 of, 76–77, 135, 209, 331
Securities and Exchange Commission (SEC), 35–39, 75, 76, 129, 168, 201, 217
anti-takeover legislation and, 260–61
Boesky Day and, 318, 320–30
Boesky investigated by, 305–6, 312, 318; see also Boesky Day
consent decrees and, 37, 120, 160, 279, 322
14D documents and, 133
Levine and, 254
Milken’s depositions for, 35, 79, 81, 83, 85–88, 279, 308–12, 315, 326
National Can deal and, 132–33
Pantry Pride and, 214–15
Sullivan and, 200
13D filings with, 118–19, 154, 172, 191, 291, 293–94, 321, 325, 326, 327, 351
TWA deal and, 182
Seger, Martha, 264
Senate, U.S.:
Banking and Currency Committee of, 37
Subcommittee on Securities of, 171, 260
senior debt, 45–46, 98, 123–24, 166
Shad, John, 41
Sharon Steel, 120, 124, 139
Shearson, Hamill, 336
Shearson Hayden Stone, 40, 41, 43, 336
Shearson Lehman Brothers, 250, 254, 318, 346
“Shearson Mafia,” 43, 74, 97
Shenkman, Mark, 47, 48, 180, 214, 215, 277–78, 310–11
on Boesky Day effects, 333–34
Shenkman Capital Management, 214, 277, 310–11
Shipley, Walter, 211
Sick, William, 147
Siegel, Herbert, 110
Siegel, Martin, 101, 176–77, 253, 255–58, 308, 319
Boesky Day and, 328–29, 334, 337, 351
finances of, 256
Milken as viewed by, 255, 256–57
Siegler, Andy, 211
Sigoloff, Sanford, 39, 109, 117, 292–295, 327, 333
Silberstein, Ben, 319
Simon, William E., 99
Simon Wiesenthal Foundation, 313
Sinatra, Frank, 16, 60
single-premium deferred annuity (SPDA), 90
Skadden, Arps, Slate, Meagher and Flom, 101, 105, 106, 205, 208, 211, 234, 237, 257
Sloan, Allen, 270
Slovin, Bruce, 237
Smith, Randall, 77, 145–46
social revolution, Milken’s machine as, 19–20
Sokolow, Ira, 318
Solomon, David, 33, 46, 56, 58, 94, 168, 277–78
Solomon Asset Management, 94, 168, 277
Sorte, John, 130, 164, 165, 167–68, 336
Sosnoff, Martin, 132, 291
Southland Corporation, 345
Spear, Arthur, 292
Spiegel, Abraham, 91, 259
Spiegel, Edita, 259
Spiegel, Helene, 259
Spiegel, Thomas, 89–93, 115, 119–120, 132, 182, 270, 277, 279–80, 311
political contributions of, 259, 260
Spiegel family, 15
Sporkin, Stanley, 38
Spy, 236
SSC III Corporation, 280
Staley Continental, 324–27, 337–38
Standard and Poor’s, 27, 281, 283
Standard Oil, 94, 96, 231
Standard Oil of California, 12, 165, 272
Stein, Dennis, 236
Stein, Gertrude, 62
Steinberg, Saul, 12–14, 35–38, 57, 82, 93, 109, 119, 270, 273, 293–294, 296, 324, 352, 355
career path of, 36–37
Coss and, 291
Disney and, 13, 107, 164
greenmail of, 156, 291
lifestyle of, 110
Peltz and, 110, 111, 112
at Predators’ Ball (1985), 14, 15
Reliance L.P. and, 16, 120
Steiner, Jeffrey, 113–14, 126, 144–145, 305
Icahn and, 154, 159, 160–61, 178, 179, 185, 187
on Kingsley, 153–54
Stelzel, Walter, 123, 136
Sterling Bancorp, 112
Sterling National Bank, 198
Sterngold, James, 342–43, 351
Stewart, James, 320, 321–22, 329, 343
Stewart, Joseph, 178, 179
stock, 36, 69–70, 74, 96, 120, 157, 158, 207, 298, 320–28
convertible debt and, 27
equity offerings and, 45
exchange offers and, 66
junk bonds compared with, 28–29, 32
margin rules and, 211–12
options on, 151, 152, 162–63
parking of, 320–21, 327, 328
preferred, 265, 290, 325
swaps of, 110, 120
tax on dividends from, 37
stock market, 269, 270
crash of (1987), 344–46
as judge of intrinsic values, 262
see also New York Stock Exchange
Storer Communications, 176, 267
straight debt, 28
defined, 27
Stratton, James, 25
Strong Capital Management, 291
subordinated debt, 45–46, 59, 123, 166, 246
Sullivan, Fred, 15, 156, 199–200, 212, 223
Sun Chemical Corporation, 285–86
Sydorick, David, 278
Sydorick, Thomas, 278
syndicated deals, 331
Tabor, Timothy, 328
takeover entrepreneurs, Upton’s use of term, 204–5
takeovers (mergers and acquisitions; M&A):
Air Fund and, 102
egos and appetites and, 14, 15
first successful Drexel-backed, 203–4
four waves of, 96
in Japan, 243–44
Law’s views on, 262–63
Lipton’s views on, 204–5, 206, 256
in 1960s, 96, 263
poison pills and, 168–69, 216, 217, 224, 226, 256
President’s Council of Economic Advisers’ views on, 261–63
problems with, 100
pros and cons of, 261–63
in Reagan vs. Carter administrations, 97
reasons for increase of, 96–97
Rohatyn’s opposition to, 206–7
Scherer’s views on, 261–62
stars of, 101
value of, 96
Tandy, 45
Tappan, 155
Tax Equity and Fiscal Responsibility Act (TEFRA; 1982), 82
taxes, 200, 328
income, see income tax
Scherer’s views on, 263
zero-coupon bonds and, 82
Tax Reform Act (1986), 263–64
tax shelters, 54, 313
Taylor, Elizabeth, 236
Taylor, John, 307
Technicolor, Inc., 198–201, 210, 235, 236
stock of, 199–200
Teitelbaum, Naftali, 89
tender offers, 105, 163–66, 172, 185, 255, 349
“highly confident” letter and, 166
in proxy fights, 164–65
Revlon battle and, 207, 209, 210, 211, 216, 217, 218, 231
of W Acquisition Corp., 265
terrorism, TWA and, 172, 181, 183, 184
Tessel Paturick and Company, 151
Texaco, 164
Texas Air Corporation, 173, 243
Texas Gulf Sulphur Company, 306
Texas International, 47, 56
Third World, debt of, 254–55, 353
13D filings, 118–19, 154, 172, 191, 291, 293, 321, 325, 326, 327, 351
Thompson family, 345
Thomson McKinnon, 43
Thorp, Edward, 81–82, 300, 311–12, 327–28
3(a) 9 deals, 76–77, 135, 209, 331
thrift institutions, 212, 269
see also savings-and-loan associations
Time, 195
Tisch, Lawrence, 35, 57, 67, 160, 196, 208, 230
Toffler, Alvin, 246
Tokyo, mini-Predators’ Ball in, 243–244, 316, 340
tombstone ads, bracketing in, 30
Touche Ross, 25
trading, traders:
investment banking vs., 63–64
principal mentality of, 64, 66
Trafalgar, 111–14
Trafalgar Holdings Ltd., 131–32, 168, 284
transactional banking, 63
Transportation department, U.S., 172
Transworld Corporation, 233–34, 236, 322
Treasury, U.S. 26
Treasury bonds, U.S., 27, 47, 345
stripping of, 82–83
yield on, 94
zero-coupon, 82–83, 124, 267
Treasury Department, U.S., 264
Triangle Acquisition Corporation, 108
Triangle Industries, 13–14, 17, 105–109, 112–19, 141, 145–47, 168, 243, 273
in National Can takeover, see National Can deal
stock of, 107–8, 118–19, 128–29, 146
triple-A bonds, 27, 32, 243
Trottman, Stanley, 26–27, 29, 68
Flight Transportation and, 72–73
Trust Company of the West, 57, 277
Tsai, Gerald, 18, 135, 141, 147
“T-shirt organization,” 86
Turner, Ted, 217, 303–4
TWA, 19, 143, 170–88, 191, 202, 263, 297
anti-takeover maneuvers and, 171, 177
cash flow of, 171, 172
flight attendants strike and, 183, 184
Icahn liquidation plan and, 172
Joseph’s attempts to dissuade Icahn and, 170, 171
Lorenzo bid for, 173–78, 181, 187
losses of, 180, 183
Paine Webber and, 178–80
PARS system of, 179–80, 181, 184
SEC bondholder list and, 182
stock of, 170–74, 177–78, 179, 181–182
terrorism and, 172, 181, 183, 184
turnaround at (1986), 183–84, 191
unions and, 172, 174–78, 181, 183, 184
“two-tiered, bust-up junk-bond takeover,” use of term, 204
underwriters, underwriting:
bracketing of, 30
commissions and fees for, 46, 47, 66, 74, 300, 304
default rate of, 77
Underwriting Assistance Committee (UAC), 72, 131, 235, 304–7, 351
Union Carbide, 181, 213, 233, 245, 275–76, 280, 288
unions, see labor unions
Uniroyal Chemical Company, 141–145, 170, 263
“unit” deals, 73
United Airlines, 173
United Brands Company, 65
“unit offering,” 114–15
Unocal, 17, 127, 130, 166, 171, 203, 218, 322
U.S. News & World Report, 342
USX (U.S. Steel), 96, 185–88, 333
Vagabond Hotels, 319
venture capital, 60, 64, 98
Viacom International, 185, 334
Victor, Edward, 54
Vidalia, La., 349
Video Corporation of America, 198
Vision Care, 225, 234
Volcker, Paul, 264–65
Volt Information Services, 71
Wachner, Linda, 265
Wachtell, Lipton, 204, 205, 207, 211, 212–13, 231, 318
in financial scandals, 254–55
political contributions of, 259
W Acquisition Corp. (WAC), 265
Wallace, Robert, 83
Wall Street Journal, 77, 145–46, 201, 224, 233, 249, 260, 320, 322, 325, 330, 343, 348, 349, 350
Walsh, Joseph, 225–26
Walter, James, 99
E. M. Warburg Pincus and Company and Reardon and Joseph, 292
“war chests,” 19, 117, 163, 164, 169, 180, 185, 202
Warnaco, 265
Warner, Marvin, 159
Warner Communications, 258
warrants, 66, 93, 117, 127, 300–301
bonds with, 69, 71, 73–74, 114–115, 120, 289
National Can deal and, 123, 129, 131, 148
shorted securities with, 52
warrant strip fund, 300–301
Washington Post, 27, 266
Wasserstein, Bruce, 101, 253
WB Associates, 81
Wedvick, Peer, 281–83
Weinroth, Stephen, 48–49, 74, 124, 202, 252, 317, 332
career path of, 48–49
Centronics and, 339
Engel’s reinstatement and, 340, 341
quote displayed by, 244–45
Weinstein, Martin, 15
“Western convertible,” 69
Westinghouse, 45
“What Ails America—And What Should Be Done” (Icahn), 186
White, Weld and Company, 47
Wickes Companies, 117, 243, 292–295, 321, 324, 327, 333, 335, 352
GAF compared with, 295
Simon Wiesenthal Foundation, 312, 313
Wigton, Richard, 328–29
Wilkis, Robert, 318
Williams, Edward Bennett, 139
Winchester Recovery, 277
Winnick, Gary, 51–52, 83–84, 259
Pacific Assets and, 278–79
Winnick, Mrs. Gary, 51–52
Wirth, Timothy, 171, 259
Witter, William D., 48
Wolfson, Zev, 160
Wong, Eugene, 252
Woolworth’s, 45
World Bank, 94
Worldwide Trading Services, 132, 168, 280
WRC Associates, 8r Wyatt, Oscar, 12–14, 107, 109, 131
Wynn, Stephen, 16, 58–61, 70, 86, 87–88, 119–20, 298, 354
flamboyance of, 60
in megadeals, 60–61, 168
as useful to Milken, 60
Xerox, 94
Yang, Paul, 128, 140
Young, Robert, 155
Zapata Corporation, 44
Zax, Stanley, 53, 58
Zell, Sam, 118, 125, 305
Zenith National Insurance Company, 53, 58
zero-coupon Treasury bonds, 82–83, 124, 267–68
Zimmerman, Michael, 253
THE AMERICAN LAWYER
SIMON AND SCHUSTER
Copyright © 1988 by Connie Bruck
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Published by The American Lawyer/Simon & Schuster. The American Lawyer is published by Am-Law Publishing Corporation. Simon and Schuster is a division of the Simon & Schuster Trade Division.
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Library of Congress Cataloging in Publication Data Bruck, Connie.
The Predators’ Ball: the junk-bond raiders and the man who staked them/Connie Bruck.
p. cm.
Includes index.
ISBN 0-671-61780-X (The American Lawyer/Simon and Schuster)
1. Consolidation and merger of corporations—United States. 2. Junk bonds—United States. 3. Milken, Michael. 4. Stockbrokers—United States. I. Title.
HD2746.5.B78 1988
332.63’2’0924—dcl9
88-11572
CIP
ISBN 0-671-61780-X
ISBN 13: 978-1-4767-3771-3 (eBook)