Acquisitions: Invasion from the Armchair

James J. Ling, 45, chairman of Dallas-based Ling-Temco-Vought Inc., is a military buff who describes the conferences that lead up to his corporate takeovers as "war games." Last week, after a long war game, Ling made a tender offer for a controlling 62% of the stock of Pittsburgh's Jones & Laughlin Steel Co., the nation's fifth largest steelmaker. The offer meant that LTV stood ready to ante up $425 million in one of the largest cash tender offers ever made; at $85 per share, it also meant that Ling, to ensure quick action, was paying a big bonus on shares that opened last week at $50, closed at $77, thereby moved up 27 points in five days as the camp followers took quick advantage of the war games. And since

J. & L.'s board of directors is unopposed, the offer is most likely to be accepted; the steel company will probably become the biggest single unit in a conglomerate that already includes such divisions as Wilson meats, sporting goods and chemicals, Okonite cable and floor coverings, airplane, missile and electronics manufacturing and, since last February, Braniff Airlines and National Car Rental.

Of the $425 million involved, Ling will borrow $100 million from a syndicate of U.S., Canadian and European financial institutions with Wall Street's Lehman Bros, and Goldman, Sachs acting as bankers. Another $200 million is on hand as ready cash, including $60 million from a public sale of 600,000 shares of LTV stock last fall. LTV will raise the rest of the necessary money by selling off its interest in two insurance companies, Stonewall

Insurance and American Amicable, and the First Western Bank & Trust Co. of Los Angeles.

Whether Ling can succeed in the close-knit steel industry—where other conglomerate kings like Norton Simon have failed—remains to be seen. LTV plans to stick to a well-tried tactic: as in earlier acquisitions, it will go along with the old management. The stock that LTV acquires will be put into a five-man voting trust until 1971, with present J. & L. officers having a controlling three-man vote among the trustees. But there will be plenty of dividends for LTV. Jones & Laughlin recently reported first-quarter earnings of $11,706,000 on sales of $277 million. In his tender announcement last week, Ling also noted that the company is involved in a threeyear, $400 million improvements program, which ought to sustain earnings in years to come. All that should make J. & L. an attractive occupied territory for any corporate armchair general.