Dodge Financing

Dillon, head of the banking firm of Dillon, Read & Co., does not believe in letting the grass grow under his feet. Within a week after he had purchased the Dodge Brothers

Automobile Co. (TiME, Apr. 13), he had rechartered and recapitalized it, had begun the sale of the new corporation's securities.

The capitalization of Dodge Brothers, Inc., will consist of $75,000,000 of convertible, sinking-fund debentures; 850,000 shares of 7% cumulative preference stock and 2,000,000 shares of common stock. The first public offering made in connection with the Dodge financing has consisted of the 850,000 preference shares, offered at $100 or $85,000,000 altogether. With every preference share, a common Class A share was given as a bonus. It was tremendously oversubscribed, subscriptions ranging from $100 to $2,000,003 and aggregating almost $500,000,000. The issue was at once listed on the New York Stock Exchange, where it went promptly to a premium. The second step in the new financing consists of the public offering of the $75,000,000 of debentures.

The whole transaction of buying and reselling the Dodge business has been one of the most rapid in the history of investment banking, especially when the magnitude of the operation is recalled. Within a week, the old concern was purchased under an intricate contract, the new Company was chartered, the form of its capitalization and details as to its several securities determined, a selling syndicate of about 1,000 firms all over the country organized and a prospectus published. In addition, elaborate statistics had to be furnished to several Blue Sky Commissions. The bankers handled the whole deal from Manhattan by long-distance telephone.