The Takeover that Failed

Into London's Anglican Church of St. Vedast last week filed a rare body of worshipers--150 executives and employees of Courtaulds Ltd., Britain's biggest textile manufacturer, to offer corporate thanks for their "deliverance from anxiety." The cause of their rejoicing: the failure of giant Imperial Chemical Industries Ltd. in its $596 million bid to swallow up Courtaulds and thereby achieve a near-monopoly of Britain's synthetic fiber industry. In the biggest takeover fight in the history of British business, I.C.I, had managed to acquire only 38.5% of Courtaulds' outstanding common shares--enough to make it Courtaulds' biggest single stockholder, but not enough to give it control.

The great I.C.I.-Courtaulds battle began ten weeks ago when Courtaulds directors, after secret merger negotiations, rejected as too small I.C.I.'s offer to pay the stock equivalent of $504 million for all of Courtaulds' outstanding shares. At that, I.C.I.'s icy-smooth Board Chairman Stanley Paul Chambers brusquely bypassed Courtaulds management entirely and made a public appeal to Courtaulds stockholders to trade their shares for I.C.I, stock on a five-for-four basis. Courtaulds fought back with promises of increased dividends (to 13% plus a 2.5% tax-free capital dividend), and Britain's press and Parliament erupted with cries of "monopoly." Brushing aside all such criticism, Chambers increased his bid until he was offering double the original market price of Courtaulds stock and twice postponed his deadline for taking up his offer. When he finally cried quits last week, I.C.I, had spent $700,000 on publicity and mailings alone.

For the fast-moving Chambers, hitherto rated as one of Britain's ablest executives, failure to win over a majority of Courtaulds' stockholders marked a sorry setback. At his own stockholders' meeting last week, he was assailed with cries of "dictatorial" and "little Napoleon." But the businessmen of the City of London had by no means written Chambers off. Unpopular as they were, his tough tactics had won I.C.I, so big a stake in Courtaulds that many Britons believed that Courtaulds' management will ultimately feel obliged to agree to closer ties with I.C.I, in artificial-fiber production.

This file is automatically generated by a robot program, so reader's discretion is required.