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About The Battalion. (College Station, Tex.) 1893-current | View Entire Issue (Aug. 26, 1981)
Ip 1 any S] game is e isn’t 1 i collusions ! was thetss uiringadra licensing I# ys to ens® rice the cm ns said, “k ople in it of the n» .mum price, jgulationm: : the curret any state a he voluntas w business: : govemmei: es ays eeksaj a’s taxisnol liscriminaK cersorcoi' ■cision, Sei eda billm nt on sever bill wiir'get > the fedenl historical! mtradicttk •n controlli along pari) >s and have de issue isi ig Montai! jsecoaliss )addsabocl bill in tit Businessmen question merger THE BATTALION WEDNESDAY, AUGUST 26, 1981 Page 9B Conoco merger debated United Press International NEW YORK — As DuPont stockholders gave their blessing to the acquisition of Conoco last week, a question lingered in the aftermath of the biggest corporate takeover battle in U.S. history: Did Conoco, facing a barrage of takeover offers, make the right moves? “There are a lot of preventive things companies can do to dis courage a takeover, but there was so much money involved and such powerful forces at work there probably wasn’t anything much Conoco could have done to pre vent it,” said Edward R. Aranow, an expert on takeover strategy with the New York law firm of Bo- tein, Hays, Sklar & Herzberg. Frank Easterbrook, a law pro fessor at the University of Chica go, said: “From the very first step, Conoco management did a disser vice to stockholders.’’ Dennis Williams, president of W.T. Grimm & Co., a merger in termediary, said: “I think Conoco played its cards just right. Conoco ended up with basically what it wanted. It was successful in gain ing a higher dollar figure than ori ginal expectations and ended up with the bidder it favored.” The topic has become a popular source of debate on Wall Street and will probably provide engag ing controversy for students in business school classrooms for years to come. An entire industry of legal, News Briefs ,Yetv lens developed United Press International Material used in bullet-proof windows is also being used to make eyeglasses for athletes and other people with active lifestyles. A hard-coated, polycarbonate, single vision, corrective lens that resists scratches and hard knocks has been introduced by the Ophthalmic Products Group of Centex Corp. The manufacturer says it is the “toughest prescription lens made.” It is one-half the weight of glass lenses. meyGenei' urt brief« [ontana d the profei 1 'slpportfa Lamp* help rose growth tfeden (ation, clusivelj e said the!' ^ramm ;ot to b constraints l be limits! hen the t! icing stats I • BERLIN, N.Y. — High-pressure sodium lamps at one company’s greenhouses in Berlin help in crease commercial rose produc tion by 60 percent during the winter. Albert S. Riccardi, president of HenryJ. Seagroatt Co., Inc., says supplemental lighting from the lamps also produces a healthier looking plant and a larger, firmer bud. The light increases the photosynthetic rate, raising the sugar content of the leaves to make them larger and greener. "Valentine’s Day, Easter and Christmas are three major peak demand periods for commercial growers, and deficient natural light conditions at these times can be improved upon with the use of energy from electric lights,” Ric cardi says. The Sylvania lamps extend natural daylight by burning from 3:30 p.m. to 9 a.m. On heavy over cast days, the lamps are on 24 hours a day. Carbon dioxide enrichment also is applied throughout the 24- hour period. “This helps build up the carbohydrates in the plants and helps stimulate growth re sponses,” Riccardi says. Contracts up repair costs NEW YORK — Should you buy a service contract along with your new washing machine, TV set or other large appliance? Chances are the company, not the buyer, will come out ahead on such contracts, says consumer re porter Betty Furness. As evidence, she cites a Mas sachusetts Institute of Technology study that priced out the cost of owning a color TV for six years both with and without a service contract. The cost of the contract, plus charges for repairs made but not covered by the contract, came to almost 10 times the expected cost for out-of-pocket repairs, Furness says in an article in the Sept. 1 issue of Family Circle magazine. The MIT study also indicated prices for refrigerator service con tracts were worse — 16 times the expected repair costs. Service contracts tend to have restrictions on transfer, Fumess added. The contract may not cov er the appliance if you move it to another house. public relations, insurance and financial firms has developed to help companies defend against unwanted takeovers. But Williams says if the com pany’s stock is well dispersed — and management doesn’t have persuasive control over it — and the bidder makes an attractive offer, “it’s very difficult to keep the buyer from going ahead with his plans.” In that case, he said, the best a company can do is try to get a Frank Easterbrook, a law professor at the Uni versity of Chicago, said: “From the very first step, Conoco manage ment did a disservice to stockholders. ” better price from a preferred mer ger partner. Morris Mendelson, finance professor at the University of Pennsylvania’s Wharton School, said a company’s fate often rests with the professional traders on Wall Street. “If they think there’s a good chance for the company to be taken over then they’ll start buying up the stock,” he said. “They’re just interested in making a fast profit and not interested in what happens to the company 10 years from now.” After rejecting the Seagram Co. bid as inadequate, Conoco, realizing its days as an indepen dent company were numbered, turned to a “white knight” — Du Pont — and a friendly merger agreement at a higher price was drawn up. One of the most common de fensive tactics, which Conoco em ployed against Seagram and the third bidder, Mobil Corp., is to file lawsuits against the aggressor company. Even though Mobil offered the highest price, Conoco fought the bid saying it raised anti trust and other public policy issues. If not effective in thwarting the bid, legal action often helps stall for time either to find a “white knight” or for others to join the bidding. Easterbrook contends manage ment has no business taking such actions. Stockholders, he-said, are best able to determine what’s in their own best interests. The tender offer, seeking to purchase shares from stockhol ders, provides the principal pro tection for stockholders, he said, since if the bid is too low someone else can come in and make a high er offer. “There is no indication at all that DuPont and Mobil would not have jumped into the Conoco auction.” What happened, Easterbrook said, was that Conoco paved the way for Du Pont and a bid which was over $1 billion less than Mo bil’s. But, Aranow said: “For the di rectors to sit by passively is really not carrying out their full respon sibility.” He contends directors may The Conoco merger has become a popular source of debate on Wall Street and will probably pro vide engaging controver sy for students in busi ness school classrooms for years to come. know of imminent developments which have not yet been made public and which could affect the stock price. Directors’ responsi bility, he added, goes beyond price and stockholder interests. “I believe that while directors are primarily responsible for look ing after the interests of stockhol ders they still have some obliga tion to the entire enterprise, and that includes employees and even the effects generally on the eco nomy,” he said. Retirement advice available United Press International The prospect of retiring brings a multitude of questions needing expert advice. Here, from the multitude of organizations offering assistance, are some excellent sources. —Your nearest Social Security office. Ask for “A Woman’s Guide to Social Security" and while there gamer any other pamphlets which fit your particular needs. —The American Association of Retired Persons, 1909 K. St. N.W., Washington, D.C. 20049. Or see if there’s a chapter in your area. •—The Older Women’s League Educational Fund, 3800 Harrison St., Oakland, Ca. 94611. Has information on older women and pensions, divorce, health, welfare, widowhood, and social security. —The Gray Panthers, 3635 Chestnut St., Philadelphia, Pa. 19104. —The National Council on Aging, 1828 L. St. N.W, Washington, D.C. 20036. —National Council of Senior Citizens, 1511 k St, N.W. (J . Washington, D.C. 20005. —Action, 806 Connecticut, Ave., N.W., Washington, D.Ci 20525. Stop lookiM-lti MinThe WW/WT Performance HAVING PROBLEMS WITH “BANKERS’ HOURS”? 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