Thomas G. Pownall, who popularized the "Pac-Man defense" in business circles when he daringly used it to ward off a legendary 1982 hostile takeover of his Martin Marietta Corp., has died. He was 83.
Pownall, chief executive from 1982 to 1988 of what is now Lockheed Martin Corp., died June 24 of pneumonia near his home in Potomac, Md.
Named for a popular video game featuring a little circular icon that gobbled up its enemies, the Pac-Man defense emerged in the corporate takeover wars in the spring of 1982 with a thwarted struggle for Cities Service Co.
But the savvy, tough-as-nails Pownall perfected the technique -- in which the takeover target turns the tables and acquires the predator firm before it can be consumed itself.
What Forbes magazine described as the "comic-opera takeover battle of 1982" began that August when Bendix Corp. announced, in a letter from Chairman William M. Agee, that it had bought a majority of Martin Marietta shares and planned to buy the rest for $43 each.
"His letter announcing the tender offer was a gun at my head," Pownall, a former Navy officer, later told Time magazine.
Pownall, who had joined Martin Marietta in 1963 but had occupied the chief executive's chair only four months, and his board were convinced that Bendix, an electronics company, knew nothing about the operations of Martin Marietta, a Bethesda, Md.-based aerospace manufacturer.
A takeover, they decided, would be bad for business.
Audaciously, Pownall employed the Pac-Man defense by countering that his company would buy Bendix for $75 a share.
The strategy worked. Martin Marietta remained independent, while Bendix was soon taken over by Allied Corp.
Pownall demonstrated, New York takeover lawyer Dennis Hersch told The Times in 1982, that "you can use the defense, and even in the face of someone who's already bought you, you can go out and buy them."
The defensive maneuver spawned books, inspired the creation of courses in business schools and made Pownall something of a folk hero on Wall Street and beyond.
Adding Martin Marietta's chairman title to his credits, Pownall quickly set about reducing the $1.3-billion debt incurred in the takeover war. Within a year -- rather than the 10 years Pownall first estimated -- Martin Marietta had bought back all its shares from Allied.
