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Where Have All the Raiders Gone? : Takeovers: In the past decade, brash corporate predators rose to fame, reshaped the business landscape, then fell from glory. What became of them?


T hey were the corporate cowboys of the 1980s--entrepreneurs who emerged from nowhere to take on established companies and corporate chieftains. The raiders often claimed to be playing a Robin Hood role, wresting undervalued assets from entrenched managers and redistributing the wealth to shareholders. Their critics described them as Jesse James-style bandits, virtually stealing assets to enrich themselves. In any case, the raiders have found new roles as the market for high-risk, high-yield junk bonds--their primary source of takeover financing--has collapsed. Some have become well-established corporate managers, while others are subjects of government and investor probes. Still others seem to be plying their trade in new ways, and some have ridden quietly off into the sunset. The Managers

Weaned as a raider at his father's knee, Ronald O. Perelman became one of the nation's most successful takeover artists after borrowing $1.9 million in 1978 to buy a small, unprofitable chain of jewelry stores. He sold off its retail outlets and its stock of gold and diamonds separately, earning a $15-million profit in the process. Perelman then invested his $15 million in MacAndrews & Forbes, a troubled licorice extract and chocolate concern, borrowing the rest of the $50-million purchase price.

With debt raised by Drexel Burnham Lambert's junk bond king Michael Milken, Perelman used MacAndrews as a vehicle to help him buy a variety of companies, including Los Angeles-based Technicolor, Consolidated Cigar Corp., Pantry Pride and, finally, Revlon Corp. Revlon, which at $1.8 billion was 10 times the size of Perelman's previous acquisitions, was nearly half paid for with a "blind pool" of junk bonds.

Within weeks of taking over, Perelman sold $1.4 billion of Revlon's assets and sliced away corporate fat--such as a lavish corporate jet that transported Revlon's executives on hunting trips.

But in 1986, when troubles with Drexel and the junk bond market started to surface, Perelman saw the writing on the wall. He began to refinance his junk debt with lower-cost bank loans, an indication that he'd turned the corner from raider to a mainstream corporate manager.

Since then, he has bought Marvel Comics for $83 million; New World Entertainment for $145 million; Coleman Co., the camping equipment manufacturer, for $545 million, and five troubled savings and loan associations in Texas. In the S&L deal, Perelman invested $315 million but got an estimated $900 million in tax breaks that can be used to shelter income from his diverse consumer products empire.

Perelman's operations are largely profitable, and Forbes magazine lists him as one of nation's richest men with an estimated net worth of $2.75 billion.

Perelman slowed his takeover activity in the past year, although industry experts say he has plenty of cash and bank financing available for potential acquisitions. He also has his hands full turning around Coleman and the sick Texas thrifts. And with a growing reputation as a clever corporate manager, Perelman is likely to shun hostile deals in favor of friendly acquisitions, market experts say.

Ronald Vannuki, managing director of Drake Capital in Los Angeles, observed that Perelman "was a Rodney Dangerfield type. Now he's one of the richest men in the country and is really making a move for respectability."

After dropping out of medical school, Carl C. Icahn started his financial career as an arbitrager, a speculator in takeover stocks. But he quickly learned that he could make a lot more money by trying to buy the companies themselves.

At various times, he threatened to buy Tappan Co., Marshall Field & Co., Dan River and Gulf & Western, forcing the companies to restructure or sell out to a higher bidder. In all, Icahn walked away with nearly $100 million for selling his stock back to management--a practice known as "greenmail"--or to other bidders.

He completed an estimated $405-million bid for ACF Industries, an oil field equipment and auto parts manufacturer, in 1983. But he was still considered a greenmailer until he won control of TWA, the troubled airline, in 1985.

Since then, he has been actively managing TWA--struggling to get its costs under control and woo new passengers. In the meantime, he has taken large positions in USX Corp., the Pittsburgh-based steel and energy concern formerly known as U.S. Steel, and in Texaco Inc.

Late last year, Icahn said he may raise his stake in USX because he was dissatisfied with the slow pace of the company's restructuring plan. But while Icahn's statement might once have sent USX shares soaring, the market didn't react this time.

"The market is not responsive to takeover stories because it doesn't believe these raiders can support their buyouts with junk bonds anymore" said one San Diego-based money manager.

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