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Henley Group's Chairman Puts Lots of Bite in 'Dingman's Dogs'

July 22, 1987|CHRIS KRAUL | San Diego County Business Editor

SAN DIEGO — Henley Group Chairman Michael D. Dingman has been doing things his way since he quit the University of Maryland to sell flagpoles against the wishes of his father, a former AT&T vice chairman.

More than 30 years later, Dingman's way of making deals, profits and headlines has earned widespread admiration on Wall Street. His latest move was Tuesday's announcement that Henley would seek permission to boost its stake in Santa Fe Southern Pacific from 5% to just under 25% and buy back $700 million worth of his own company's common stock.

By far the most striking measure of Dingman's credibility was the $1.2 billion Henley raised in its initial public offering in May, 1986, the most ever by an American company at the time. The offering succeeded despite the fact that Henley, dubbed "Dingman's Dogs," was a collection of 35 unwanted, largely money-losing companies cast off by Allied-Signal.

Dingman's credibility flows from results. The public companies he has managed during the past 15 years have earned handsome returns for shareholders, analysts say.

Wheelabrator-Frye, a company formed in 1971 from operations Dingman had culled from troubled Equity Corp., earned a six-fold return for investors over 12 years ending, with its acquisition in 1983 by Signal Cos. for $1 billion.

Stockholders in Signal, where Dingman served as president before the company was acquired by Allied Corp. in September, 1986, also "benefited dramatically" from Dingman's stewardship, said Mark Hassenberg, vice president of the New York investment firm of Donaldson, Lufkin & Jenrette. Dingman's financial savvy helped make Signal's merger with Allied possible, Signal Chairman Forrest Shumway said later.

Dingman, now 55, has continued his win streak at La Jolla-based Henley. Henley went public at $21.25 a share in May, 1986, and the stock closed Tuesday at $29.25 a share, a 38% improvement over 14 months. In addition, Henley shareholders received a stock dividend in April of one share in Fisher Scientific Group, a former Henley subsidiary, for each 16 shares of Henley they owned. Fisher now trades over the counter in the $18 range.

Henley shareholders probably will also receive stock in Wheelabrator Technologies, a Henley subsidiary that the parent company plans to spin off via an initial public offering later this summer, analyst Richard Sweetnam of Kidder, Peabody & Co. said. Henley may also spin off its General Chemical operation, Sweetnam said.

Carla Hills, a former U.S. secretary of Housing and Urban Development who sat on the Signal Cos. board with Dingman, said his success stems from an ability to attract "extraordinarily bright, creative and affable" executives to help manage his companies, many of whom have been with him since the Wheelabrator-Frye days.

Dingman is a skilled self-promoter, said Katherine M. Stults, a vice president in research at Dean Witter Reynolds in New York. But "there's his track record, so it's more than PR (public relations). He's a genius at understanding what Wall Street wants. And right now it wants deals," Stults said.

After jobs selling flagpoles and medical instruments, Dingman learned his way around Wall Street during a six-year stint beginning in 1962 at Burnham & Co., the predecessor investment banking firm to Drexel Burnham Lambert. By the time he left Burnham to take over Equity in 1968, he had been made a partner.

Dingman's life style has also captured the imagination of some investors. He owns a $5-million ocean-front home in La Jolla, a fleet of antique cars, vacation homes in Colorado and Maine and a yacht. But he insists that he leads a quiet life with second wife Betsy, the daughter of San Diego Superior Court Judge Ross G. Tharp.

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