Advertisement
YOU ARE HERE: LAT HomeCollections

Charles Hurwitz--Publicity-Shy Empire Builder : Kaiser Aluminum's Bidder Is a Private Person but Controversy Follows Him

May 30, 1988|AL DELUGACH | Times Staff Writer

Ten years ago, Texas-born Charles E. Hurwitz sashayed into Los Angeles and waltzed away with McCulloch Oil Co. Since then, the mild, owlish-looking takeover artist has been building a natural resources empire centered in California.

Adding to the oil and extensive land holdings acquired with McCulloch, Hurwitz picked up one of the world's largest holdings of redwood timberland in Northern California by acquiring Pacific Lumber Co. in 1986.

Now, assuming public stockholders go along with management's deal with Hurwitz, the latest in his collection will be Kaiser Aluminum & Chemical Corp., the nation's fourth-largest aluminum producer.

Hurwitz, 48, walks softly and carries a big desire for privacy. For a long time after the battle for McCulloch (renamed MCO Holdings Inc.), the Houston-based financier managed to keep out of the California limelight.

Even when he riled Frank Sinatra and other wealthy denizens of Rancho Mirage, Calif., several years ago by overcoming their opposition and building a $75-million resort hotel amid scenic hills of the wealthy desert playground, Hurwitz avoided personal publicity. Everything was handled through his private development company, Federated Development Corp.

But his profile was elevated considerably after he captured Pacific Lumber. The San Francisco firm since has proceeded to double the rate at which it is cutting old-growth redwood trees ranging in age from 200 to 2,000 years. This enraged conservationists, some governmental bodies and many private citizens.

The furor attracted scads of newspaper, magazine and television coverage since last year. After months of withering fire, the firm just last Thursday said that it has abandoned its clear-cutting of virgin old-growth redwood stands.

CBS News staked out Hurwitz's offices when it tried to talk to him last fall for a critical account of the timber cutting, according to a source close to the financier. The source also noted major negative reports by various national magazines, saying Hurwitz attracts media interest "like a lightning rod."

Keeps Forging Ahead

In the midst of the media storm, Hurwitz went before a congressional hearing last October that was examining trading of Pacific Lumber's stock before his buyout. A staff report blasting his lumbering operations overshadowed the primary topic.

One of his attorneys says Hurwitz is expecting no problems from government on the stock matter, which is related to the continuing Wall Street insider trading investigation that sprang from the Ivan F. Boesky scandal. But he got unfavorable press from the hearing just the same.

Some more negative publicity came earlier this year as Hurwitz's loss-plagued oil and gas operations gave up the ghost, a victim of the industry depression. MCO Holdings wrote them off as discontinued operations.

Hurwitz himself has declined press interviews for the last several years and would not talk to The Times for this article. The scholarly takeover expert shrugs off the negative publicity and keeps forging ahead, his aides say.

Close associates describe Hurwitz as remarkably tenacious and unflappable, and he has demonstrated these traits along the California trail, from McCulloch to Kaiser.

In his latest deal, Hurwitz agreed to buy KaiserTech Ltd., Oakland-based parent of Kaiser Aluminum & Chemical, for $19.375 a share. After an initial struggle, KaiserTech's board approved the deal and announced the sale last Monday to Maxxam Group Inc., now a subsidiary of Hurwitz-controlled MCO Holdings. Headquartered in Los Angeles, both firms are publicly traded and comfortably profitable.

As with his purchase of Pacific Lumber, Hurwitz is relying heavily on Drexel Burnham Lambert, the investment house famed for selling "junk," or high-risk, bonds to arrange financing of $850 million to buy the KaiserTech common and preferred stock that he did not already own.

Drexel Burnham's junk bonds figure in the allegations hurled at Pacific Lumber under Hurwitz' control. Critics claimed that the company's frenetic harvest of virgin redwood forests was ordered to pay the interest on the bonds. Although the Hurwitz camp argues the issue, it confirms that the lumber company has, as a result, been able to generate the cash flow for its own acquisition debt.

Hurwitz has a flair for deals achieved with heavy borrowing. But his accumulation of a string of California-based firms was only a series of coincidences, says one of his associates.

His holdings through his public companies include real estate developments throughout the Southwest and the Ozark Mountains in Arkansas; 10 retail store complexes in western New York; a golf resort in Florida and a hotel-condominium resort and 1,300 undeveloped acres in Puerto Rico.

Although the Texas entrepreneur has made California his prime business stomping ground, he continues to live in Houston with his wife of 25 years. He also has had the same office staff there for many years.

Advertisement
Los Angeles Times Articles
|
|
|