Psssttt... Auric,
Don't look now but Sean Connery and Gert Frobe may tie a knot in Operation Goldfinger if you catch my drift... <g>
interactive.wsj.com
September 19, 2000
James Bond Meets Wall Street
In Use of Deal Code Names
By KOPIN TAN
Dow Jones Newswires
NEW YORK -- To keep things under cover leading up to its recent deal
to be acquired by Credit Suisse Group, Donaldson, Lufkin & Jenrette Inc.
was referred to in merger talks and documents by the code name
"diamond."
J.P. Morgan & Co. , in its proposed
acquisition by Chase Manhattan Corp., was
just "glass."
And next time you hear executives in an elevator muttering about "Gretzky"
and "Messier," don't be too sure they are discussing hockey.
Welcome to the merger-and-acquisition boom, which has set off its own
little boomlet of sorts: the widespread use of code names to cloak secret
merger talks and the companies involved. Top executives and their
advisers have long coined covert names -- for confidentiality, for kicks.
But in this Internet-driven Information Age, with markets moving on
rumors (or the mere whiff of one), code names have gotten more common
and creative and become the stuff of street lore.
Consider the following:
Two chief executives -- one from "White" and one from "Noble" --
met in a Doubletree Inn in 1998 to discuss details of a deal. The
result: the $34.3 billion merger between Wells Fargo & Co. and
Norwest, with the names chosen to represent the companies' initials.
To camouflage this airline merger, announced in May after the peak
of the college sports season, executives referred to UAL Corp. as
"Tarheels" and US Airways Group Inc. as "Yellow Jackets."
In most cases, paranoia about possible leaks drive these names. After all,
bankers say the road to a merger is paved with assorted hazards: copied
documents, phone messages left with secretaries, the need to enter
buildings and ride elevators.
(Earlier this year, the Manhattan U.S. attorney charged 19 people,
including a temp graphics worker and word processor, with stealing
merger information while working at Goldman Sachs Group and Credit
Suisse Group's Credit Suisse First Boston unit and making about $8.4
million in illegal profits.)
Because leaks can tip off competitors, agitate employees and affect stock
prices, code names often are used on all documents and dealings and
substituted with the real names only at the last possible moment.
But code names also can lend a whiff of mystery and even romance to
merger talks. For top executives, it gives a frisson of excitement that
mirrors the thrill of engineering a ground-breaking deal. For others working
on the transaction, it adds a Bondesque edge that can turn a late-night
number-crunching exercise into an Operation ThunderCat.
Because they function as decoys, most code names are picked for their
sheer irrelevance -- the ability to throw others off the scent. But this being
Wall Street, executives have been known to strive for the clever, or to add
personal flourishes.
Some names make sense, or at least they go together, although that
compatibility bears no correlation to success. Sprint Corp. was "Snow"
while WorldCom Inc. was "White," but their planned $115 billion merger
was derailed in Washington.
On the other hand, Exxon was "lion" to Mobil's "moose," and BP was
"bear" while Amoco was "eagle." Yet these jarring and beastly pairings
both made it to the altar and now greet the world, respectively, as Exxon
Mobil Corp. and BP Amoco PLC.
Most code names follow a system of logic, and the same-initial approach is
by far the most popular. Time Inc. was "Tango" and Warner
Communications was "Wonder" on their way to becoming Time Warner
Inc. , while Lockheed was "Lunar" to Martin Marietta Corp.'s "Mars," to
form Lockheed Martin Corp. The road to DaimlerChrysler AG (a.k.a.
"Project Gamma") featured rendezvous stops in London and Paris, but the
players chose the names Denver (for Daimler) and Cleveland (for
Chrysler).
Some prefer to name the merger itself. Unicom Corp.'s merger with Peco
Energy Co. was "Bookends," Doubleclick Inc.'s acquisition of NetGravity
was "Project Ice Cream Scoop," while the proposed three-ring combo of
Alcan Aluminium Ltd., Pechiney SA and Alusuisse AG was "Project
Olympics."
For others, the names -- like the deals -- are treated like a labor of love.
Even before Richard Fisher was chairman emeritus of Morgan Stanley, he
was a hockey fan. The then-chairman in 1997 dubbed Morgan Stanley
"Messier" and Dean Witter "Gretzky," after the famed pro hockey players.
The merger that gave the world Morgan Stanley Dean Witter & Co.?
"Project Rangers."
Write to Kopin Tan at kopin.tan@dowjones.com
KJC |
