A Company for Hanns

Manhattan Investment Banker Hanns Ditisheim, 55, is a spruce, Swiss-born millionaire with a speculator's sharp eye for an underpriced stock and a burning desire to control a big company. Last week, after having a foot in the door for nearly two years, Ditisheim and a syndicate of backers bought enough stock (55%) to get control of Chicago's Butler Bros., which owns 2,375 Ben Franklin 5 & 10-c- stores, 90 variety and department stores, $9,000,000 of Chicago and" Dallas real estate, and had 1955 sales of $117 million.

Bargain Hunter. In the last seven years Ditisheim, backed by a syndicate, made raids on three other "undervalued" companies--companies whose stock was selling far below book value and where there was a chance to take over and pick up a quiet profit. The raids were only half successful: Ditisheim did not get the companies, but he and his friends picked up a nice piece of change.

P: In 1949 Ditisheim tried to take over the White Motor Co., whose stock was selling at $13 although it had a book value of $55. Buying 100,000 shares (about 3%), Ditisheim proposed a complete reorganization. But when the company refused to go along, Ditisheim was squeezed out. However, White stock moved up in the general market boom, hit $48 a share last year. Gradually selling their holdings, Ditisheim & Co. wound up with a profit in the millions.

P: In 1950 Ditisheim moved into American Woolen Co., whose stock had a market price of $22-$25 and a book value of around $69. With 98,000 shares (10% of the stock outstanding), Ditisheim and the same group of backers again tried to reorganize, but failed when Executive Committee Chairman Albert Wiggin, who backed their bid, died in mid-deal. Selling their stock at an average $40 a share, the Ditisheim group still counted a $2,000,000 profit.

P: In 1951, Ditisheim stepped into United Board & Carton Corp., whose stock had been limping along at around $9 a share (book value: $24). He joined a group that bought 130,000 shares (54%) and actually had control, but once again he sold out his share of the stock (13,000 shares), for a $155,000 profit. This time Ditisheim's reason was to build up cash to move into Butler Bros., which was then selling around $11 a share but had a book value of $30.

The Moneymaker. The son of a back-country Swiss doctor, Ditisheim became a Basel banker specializing in international finance. He made his first killing in 1931 arranging a $100 million debt payment by Russia to Germany. Six years later he helped Nationalist China use its silver hoard to float a $10 million war loan. He has always enjoyed spending money as much as making it. Coming to the U.S. in 1941 "to retire," he first lived in California, then bought a house in Tarrytown, N.Y., played polo, water-skied, flew small planes. After his wife persuaded him to stop flying, he took her up for one last ride, buzzed under the George Washington Bridge in a final amateur airman's salute. To win a $100 bet, he once water-skied down the Hudson

River 28 miles from Tarrytown to Manhattan's Battery--wearing a business suit. Ditisheim's retirement lasted only until 1949, when he started scanning the New York Stock Exchange for bargains. After his false "starts, Ditisheim and friends plunked down some $3,550,000 for the initial 241,000 shares of stock in Butler Bros, in mid-1954, and Ditisheim won a seat on the board. Butler had been in the doldrums for years. But it was making a strong comeback under President Bert R. Prall, a onetime Montgomery Ward vice president who had taken over in 1949.

Angry Blast. Ditisheim at first got along well with Chairman Hugh R. Sharp Jr. and President Prall. All agreed on selling off a covey of money-losing stores, disposing of a low-profit floor-covering division. In 1954, profits of $1,605,156 were 34% better than in 1953. But the honeymoon ended. Ditisheim wanted to buy into Chicago's big Spiegel mail order house and spin off the real estate into a separate corporation, with the stock to be distributed among Butler stockholders as a capital gain. Under Chairman Sharp, Butler's board turned him down. With that, Ditisheim's group bought control.

In full command last week, Ditisheim, who personally owns 27,000 shares of Butler, was driving ahead with his real estate spinoff, was working with Prall to boost Butler's successful nationwide Ben Franklin chain stores to an even 4,000. Chairman Sharp resigned with an angry blast, charging that Ditisheim had bought Butler Bros, "to use the company's funds for various speculative enterprises totally unrelated to Butler's basic line of business." Replied Ditisheim: "I don't want to tear Butler down. I want to build it up." With Butler earnings for 1955 estimated at double those of 1954, he thinks he can boost profits more by expanding into other promising fields. Says Ditisheim, whose syndicate has already made a $6,500,000 stock profit in Butler Bros, (current price: $30 a share), "As soon as we find another Butler Bros., we'll grab it."

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