Mergers/Acquisitions
[Stated at current values] The
world's most famous manufacturer of large aircraft for most of the 20th century,
holding an order book of more than 600 million dollars (6 bilion in today´s
money), was strapped for cash to build all these aeroplanes. Douglas Aircraft
Company's bankers had just called in its lines; they did not have the same confidence
in the son as they had in the father and founder. Management were suddenly facing
the real possibility of a chapter 11 bankruptcy. Little McDonnell Aviation, flush
with money from military contracts - and assuming there could be no other timely
bids - had made a derisory offer to acquire Douglas Aircraft Company as if it
were in liquidation.
Douglas management subscribed to more numbers of our newsletter than any other
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American company, and the Douglas family were close friends of our principal aviation
associate. It was natural they would turn to wealthover to help them at such
a time. A quick evaluation confirmed our fear that if we did not find an immediate
solution it would be either Mack McDonnell's nothing offer or bankruptcy. We pulled
out all the stops while maintaining the maximum discretion. Mack was known to
play rough and if he thought the Douglases were shopping his offer, through us,
he was capable of backing out and waiting to cherry pick from the liquidators.
Within a week we had a bonafide intervening bid from Sunray DX.Oil Co. While merging
Douglas with an oil company made no sense, the CEO and
main owner of Sunray was an avid pilot
and aviation buff, welcomed an
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opportunity
to
bid for Douglas Aircraft.
Mack, though furious, had no choice but substantially to raise his offer or miss
the opportunity as a healthy minnow to swallow a wounded whale. McDonnell Douglas
was born. [Our job done] Postscript:The slowdown in military orders and the failure
of the DC10 to live up to the Douglas reputation forced McDonnel Douglas into
a merger with Boeing - once Douglas' mini upstart rival.0ºººion
pioneer Donald W. Douglas, but his Jr. and heirs. Therefore when it was time to
pay wealthover for saving their estate we were offered a repossessed DC9 in lieu
of payment.This interested
our pilots but thankfully our lawyers prevailed. |