Three Who Watch, Wait and Strike

T. Boone Pickens is only the best known of today's corporate raiders. Dozens of others stride through the corridors of the financial world, examining balance sheets, calculating the value of assets and looking for attractive takeover targets. They are usually loners out to make their own millions, although sometimes they join forces or end up on opposite sides. Last week's battle for Phillips Petroleum involved not only Pickens but three other leading takeover masters:

The Prowler. Carl Icahn, 48, looks for all the world like a typical, affluent suburbanite. He lives with his wife Liba in Westchester County, near New York City, and likes nothing better than to hang around the house on weekends, playing tennis or going for a swim in his pool. While he does not look like someone who would frighten even a PTA board, he is a scourge to the giants of corporate America. Last week newspapers across the U.S. carried full-page ads with the scare headline IS ICAHN FOR REAL? The ads were part of a counterattack by Phillips Petroleum against Icahn's attempt to take over the firm.

Feelings were running high in Bartlesville, Okla., last week, where Phillips shareholders debated Icahn's proposal; they began voting on whether to accept or reject a financial plan proposed by Phillips' management. A group of 40 townspeople burned a pile of Icahn's proxy statements.

Angry stockholder meetings are a long way from Icahn's early life as the son of a synagogue cantor in New York City. After studying philosophy at Princeton, the future raider spent two years in medical school, but quit when he realized that he was not enjoying the work--and becoming a bit of a hypochondriac to boot. After a stint in the Army at Fort Sam Houston, he used a few thousand dollars won in barracks poker games to get started on Wall Street. He made $50,000 in the bull market of 1961, then lost it just as quickly when stocks tumbled. To this day he is wary of investing in the market. Says he: "I can't stand it when people try to predict what the market is going to do. It simply can't be done."

Icahn moved into a field where he could have more control: takeovers. He now specializes in finding poorly run companies and then launching a raid, which involves an effort to get con- trol of the firm. Icahn's record is impressive: since 1968 he has made more than $100 million in the takeover game. One premise of the Icahn strategy is that large American firms are staffed with poor managers. Says he: "Unfortunately, many of today's chief executives have spent the first 20 or 30 years of their business careers studying how to please their boards rather than concentrating on how to increase their corporations' profitability. Top management in America, with many notable exceptions, is sadly lacking in knowledge and leadership."