Books in Brief: The Takeover Barons of Wall Street

The Takeover Barons of Wall Street, by Richard Phalon (Putnam, 264 pp., $13.95). During the bullish days of the 1920s, corporate consolidations were as commonplace as bootleg whisky and often twice as potent. The next wave of large business acquisitions, in the 1960s, was encouraged by liberal accounting practices and rising stock prices. By the mid-Seventies, company takeovers were proceeding at a frenetic pace, but many more of them were for cash, rather than for such dubious paper as the debentures and “Castro convertibles” of the earlier deals. Shell spent $3.6 billion for Belridge Oil, and Kraft, Inc. paid $2.4 billion for Dart Industries. These were only preliminaries for the $8-billion struggle between Du Pont, Seagram, and Mobil for control of Conoco, Inc., and the recent corporate shootout for Marathon. Corporate America has become such a web of interlocking relationships that it’s difficult to determine the players, or their products, without a program. Richard Phalon’s brisk account of the merger mania involving investment bankers, business leaders, lawyers, proxy hunters, and arbitrageurs reveals the “Takeover Game’s” Darwinian dimensions. His primary focus is Sun Oil Co.’s “midnight raid” against Becton, Dickinson Co., a New Jersey medical-supply producer, where a brokerage group nearly succeeded in securing the smaller company’s controlling interests by offering to buy the stock at 37 per cent more than the market price. Phalon wonders whether the billions involved in these power-plays might be better invested in improving America’s impoverished industrial base. And he worries that the “acquisitive itch” could reduce corporate consciousness to the point where businesses are viewed as mere “trading cards.” Yet the author believes that prudent takeovers are a positive economic force because they generate wealth for further stock purchases and venture capital. Phalon thus concludes that while the takeover is “an imprecise tool,” it succeeds in competent hands. Moreover, he insists that notwithstanding their occasional excesses, these bold takeovers confirm “that the entrepreneurial spirit still roves the land.”

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Alan L. Miller

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The Takeover Barons of Wall Street, by Richard Phalon (Putnam, 264 pp., $13.95). During the bullish days of the 1920s, corporate consolidations were as commonplace as bootleg whisky and often twice as potent. The next wave of large business acquisitions, in the 1960s, was encouraged by liberal accounting practices and rising stock prices. By the mid-Seventies, company takeovers were proceeding at a frenetic pace, but many more of them were for cash, rather than for such dubious paper as the debentures and “Castro convertibles” of the earlier deals. Shell spent $3.6 billion for Belridge Oil, and Kraft, Inc. paid $2.4 billion for Dart Industries. These were only preliminaries for the $8-billion struggle between Du Pont, Seagram, and Mobil for control of Conoco, Inc., and the recent corporate shootout for Marathon. Corporate America has become such a web of interlocking relationships that it’s difficult to determine the players, or their products, without a program. Richard Phalon’s brisk account of the merger mania involving investment bankers, business leaders, lawyers, proxy hunters, and arbitrageurs reveals the “Takeover Game’s” Darwinian dimensions. His primary focus is Sun Oil Co.’s “midnight raid” against Becton, Dickinson Co., a New Jersey medical-supply producer, where a brokerage group nearly succeeded in securing the smaller company’s controlling interests by offering to buy the stock at 37 per cent more than the market price. Phalon wonders whether the billions involved in these power-plays might be better invested in improving America’s impoverished industrial base. And he worries that the “acquisitive itch” could reduce corporate consciousness to the point where businesses are viewed as mere “trading cards.” Yet the author believes that prudent takeovers are a positive economic force because they generate wealth for further stock purchases and venture capital. Phalon thus concludes that while the takeover is “an imprecise tool,” it succeeds in competent hands. Moreover, he insists that notwithstanding their occasional excesses, these bold takeovers confirm “that the entrepreneurial spirit still roves the land.”