Object lesson of the hazards of following richer investors. Irv the Liquidator settles into a cozy retirement, his great defeats with CNC, AREM and others notwithstanding. How many thousands of people who so eagerly followed him down the primrose path ended up faring much worse than he did?
'80s Raider Irv the Liquidator Slows Down
Sat Nov 23, 9:21 PM ET
By Dane Hamilton
NEW YORK (Reuters) - Famed corporate raider Irwin Jacobs may have lost his taste for big game hunting among faltering U.S. corporations. But it's not for lack of opportunity.
For Jacobs, dubbed 'Irv the Liquidator' for his penchant for buy-and-bust-up moves at underperforming companies, the time is ripe for a new wave of corporate takeovers.
"There are so many businesses out there that just don't work," declared Jacobs, an outspoken multimillionaire whose name struck a chill in the hearts of executives at dozens of corporations like AMF and Avon during the "cowboy" 1980s' raider era.
But Jacobs, a former junk dealer who ranked with Carl Icahn, Ted Forstmann and Henry Kravis in the pantheon of feared corporate raiders, says he's content -- at 61 -- simply to manage the companies he has, rather than take on new ones.
Perhaps that's because Jacobs suffered his share of investment defeats in companies including Conseco, AremisSoft and Clarent, all of which faced a market beating over flawed business plans and investigations into securities law violations.
But Jacobs said it's just that he'd rather be fishing -- bass fishing, to be exact, in one of the 17 brands of boats made by his company Genmar Holdings, the world's largest pleasure boat manufacturer.
THE GOOD LIFE
With five personal homes spread out around the Midwest, big stakes in companies with 10,000 employees and $1.2 billion in revenue, Jacobs doesn't have to worry. He said he's more concerned about fishing tournaments and charitable work he conducts in his hometown of Minneapolis.
But he continues to share a sense of outrage with other raiders over executives at companies like Enron, Adelphia and WorldCom, who soaked their companies for millions of dollars and ran them into the ground.
"Even people that are good managers are not entitled to take that kind of money out of their businesses," Jacobs said in an interview last week.
Jacobs' most notable recent foray into the limelight was over Conseco, the financial services giant in which he bought a 16 million-share stake. When short sellers led by billionaire financier Carl Icahn publicly trashed the stock last year, Jacobs went on the attack, blasting the "shorts" in full-page newspaper advertisements.
Conseco shares collapsed this year and a bruised Jacobs bailed out, although he said he still made money. Despite the public dispute, Jacobs claims he has no hard feelings toward Icahn, who said as recently as last summer than he was still short some 12 million Conseco shares.
"Carl was right," said Jacobs. "I don't consider him a rival. We sparred a bit, but I have a lot of respect for him."
In an interview, the 67-year-old Icahn said all raiders have a common foe -- bad company management, even if they disagree over investments. That belief is what drove many to take on corporate management.
"The term 'raider' is a misnomer," said Icahn, who like Jacobs is a veteran of dozens of hostile battles, including one involving Texaco where Icahn said he netted some $600 million. "If a raider means milking the company, the real raiders are the managements, with notable exceptions."
And Jacobs has had his successes, buying big stakes in companies including Disney, Avon and ITT Corp. and agitating for change, netting him big returns on selling the stock. He declines to say what he's now worth.
Although raiders often present themselves as friends to shareholders, Jacobs is blunt about his motives. "I'm no Don Quixote or Robin Hood," he said. "I did it for myself."
IRV'S LIQUIDATIONS
With little more than a high school degree and a truck, Jacobs got his start buying junk from company liquidations across the country. His first big deal, in 1975, was buying the Rain Belt Brewery, a faltering Midwest beer maker, which he said he was "losing his shirt over." Finally he liquidated the firm for a $5 million gain.
Next he bought $325 million of receivables from bankrupt retailer WT Grant and made his money back in less than three months -- with millions left over.
The liquidations earned him the sobriquet "Irv the Liquidator," a name he says "is more of a joke than anything else. I never bought a business in my life to liquidate it."
While Jacobs said he now regularly comes across opportunities to buy companies, he's not interested, except for those that might fit with his businesses. And even if he wanted to, the era of the junk bond-financed takeover is mostly past. Now banks and brokerages generally won't finance hostile takeovers and vulnerable companies inevitably install anti-takeover provisions.
"I'm at a stage in my life that I don't have to do it," said Jacobs. "I don't want to have to do a deal to prove to myself I can do a deal." |
