Chance Vought Takeover?

Like most storied Texans, James Joseph Ling, 38, does not spare expense when he wants something. Once he wanted to indulge his golfing hobby by bringing big-time professional golf matches to hometown Dallas. They failed miserably, lost $100,000. But he could well afford it. Since 1947 he has run an investment of $3,000 in an electrical contracting business into the $150-million-a-year Ling-Temco Electronics, Inc. and made himself a millionaire.

Last week Ling wanted something else: Chance Vought Corp., the oldtime aircraft company turned missile and electronic producer. Ling, willing to spend more than $6,500,000 to get a company that grosses $215 million a year, had quietly bought 17% of the company's 1,190,540 shares. Then, even though the stock was selling at $39.88 a share, he announced that he would buy at least 150,000 shares more for $43.50 each. Chance Vought President Frederick O. Detweiler promptly denounced the offer; he said the price was little more than the book value of the stock. To block the takeover, he went into federal court seeking an injunction to stop Ling from buying more stock, or voting what he has, plus an order making him sell his holdings, on the grounds that a merger with Chance Vought would be an antitrust violation.

Neat Fit. Chance Vought fits neatly into Ling's plans to build Ling-Temco into a power in the electronic communication field. Besides its missile and electronics skills, it has a large plant next door to Ling-Temco's outside Dallas. Plant facilities are among Ling's most urgent needs for the expansion he sees ahead.

His move at Chance Vought is well timed. The company has had problems, starting with the shock of losing $116 million in Navy contracts in one economy wave three years ago. To make up for that, Detweiler expanded into electronics, acquired mobile home builders, an interest in a small data-processing firm, and an automatic controls company. His remedies thus far have not shown up in profits. Sales last year slid to about $215 million from the 1958 high of $333 million, may drop another 10% this year. Earnings slid to an estimated $3.25 per share from $4.12 in 1959. Detweiler and all his officers own fewer than 5,000 shares.

Out of the Orphanage. Ling grew up in an orphanage, where his father, an oilfield roustabout, had put him when his mother died. Never bothering with formal education, he learned electronics in the Navy during World War II and from correspondence courses. To expand his electrical contracting business, he even peddled stock from a booth at the 1956 Texas State Fair because investment bankers would not touch it. Stock that he sold at $3 a share is worth $29.25 today.

As Ling grew, he bought ten electronics companies, making equipment ranging from vibration testing devices to transmitters for tracking satellites. Last year he was big enough to be an attractive merger prospect for Temco Aircraft Corp., an airframe maker that had branched into electronics. Ling was made president of the new Ling-Temco. Earnings last year equaled or slightly bettered 1959's $1.22 per share. This was 1.9% of sales, about the same ratio as Chance Vought's.

Unless the courts stop Ling, his bid for control of Chance Vought might well succeed. At week's end tenders to sell him stock were still coming in.

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