Word: bendix
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...most wasteful takeover battles in U.S. corporate history. At its height, the contest was an unseemly spectacle of "cannibals gorging on one another," in the apt metaphor of Television Commentator Bill Moyers. Last week it ended with a whimper. In meetings at Southfield, Mich., and Morristown, N.J., shareholders of Bendix Corp. and Allied Corp. formally approved the merger of their companies. There was scarcely any dissent, but there was some sober reminiscing. Allied Chairman Edward L. Hennessy Jr., 54, said of the torturous maneuvering leading to the $2.3 billion deal: "It was a pretty sorry spectacle that gave American business...
Hennessy is a man who ought to know. Allied played the role of "white knight" in the merger mess, which was stirred up last summer when Bendix Chairman William M. Agee, 45, made a surprise tender offer for the shares of MX missile contractor Martin Marietta. But Martin Marietta turned the tables on Agee. The company promptly retaliated by trying to buy Bendix, and the result was a corporate donnybrook in which the two companies acquired huge chunks of each other and made headlines in the process. Finally Allied was called in by Bendix to buy Bendix stock and save...
...that the battle is over, there are growing worries within Allied as to just how it is going to digest Bendix-and doubts all around about the merits of white knighthood in general. The corporate Lancelots usually pay a great deal more for the companies that they rescue than hostile raiders would have paid in the first place. And they must live with the results of such expensive derring-do. Too often that means coping with huge financial burdens and assimilating unfamiliar corporations. Some of the mergers may eventually work out, but few of them, at least...
That was seen as further evidence of the frigid relations between Bendix's Agee and Hennessy. The Allied chief has vowed that Agee "will have no line duties at Allied," even though he is the company's titular president. McDonald's departure will have the intended effect of keeping Agee tied down at Bendix in Michigan, inhibiting him from becoming involved in Allied affairs back East. Hennessy has also promised that he will study, presumably with a critical eye, the "golden parachute" package fashioned by Bendix directors for Agee during the merger battle. Under its terms, Agee...
...Bendix Corp. was locked in a bitter and ultimately losing takeover battle in September as company directors huddled to plot strategy. Among their hurried decisions: a so-called golden parachute for Chairman William Agee and 15 other Bendix officers. The chute, which was designed to protect the executives following a buyout by another company, guarantees Agee an $805,000 annual salary for five years even if he is fired. That lucrative arrangement was presumably authorized by the board's compensation committee and approved by the directors, as is typical in such cases. But at Bendix there was a twist...