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http://www.electricarrow.com/CARP/agbiz/164.htm
EDITORS NOTE: From Farm and Food File for week
beginning Sunday, Oct. 8, 2000 by Alan Guebert
" . . . .George N. Gillett, Jr.is an unsinkable Molly Brown
of business, twice going down in bankruptcy (one corporate, the
other a $66 million personal bust) and twice bobbing back up. In 40
years of deal-making, Gillett has owned the Harlem Globetrotters,
several television stations, a piece of the Miami Dolphins,
Packerland Packing Co --- twice --- a huge Oregon ranch, several ski
resorts, a 15,000-acre Illinois farm, and Corporate Brand Foods
America, Inc.
"Gillett keeps his cards close; he prefers to do deals
privately, outside the view and votes of Wall Street. Corporate
Brand was a privately-held food processor owned partly by Gillett.
In 1999, he swapped his piece of the company to IBP for 4.5 million
IBP shares. On February 7, IBP bought the remainder of Corporate
Brand for 14.4 million newly-issued IBP shares.
"With his back pockets stuffed with IBP stock, Gillett then
watched as Wall Street whipped the hide off the company. After a
year of pricey acquisitions to extend its meatpacking muscle into
retail selling, word was that IBP's $2 billion buying spree had left
its wallet too thin to pull off the grand endgame. The stock tanked,
from a Nov. 1999 high of $25.27 per share to $11 four months later.
In the tumble, Gillett's IBP holdings were shaved by nearly 40%.
As reported in the October 3 Wall Street Journal, Gillett
then began to urge the IBP board to take the company private.
"I think private investors have more patience," Gillett
grumbled to the Journal.
"Maybe, but the IBP board was anything but patient once it
seized Gillett's idea. It swiftly cobbled together the financing to
put the company in private hands --- two being Gillett's. The speed
was made possible by a member of IBP's board, John Chalsty, chairman
of Donaldson, Lufkin & Jenrette, who knew where to get the money
needed to underwrite the leveraged buyout. With Chalsty holding
DLJ's checkbook, the board agreed to offer IBP's stockholders $22.25
a share for a $2.4 billion purchase. Wall Street analysts quickly
called the offer cheap, noting IBP was worth $30 a share . . . .
"
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