Magna Charter

The troika conglomerate

Nearly every businessman believes that new corporate conglomerates went out with the miniskirt. Not Raymond Mason. Says the 53-year-old chairman of the Charter Co., who has hitched together an unlikely troika of oil, insurance and communications enterprises into the 74th firm on the FORTUNE 500 list: "You get safer by getting bigger."

Charter is moving from big to magna. It has agreed to buy the ailing Commonwealth Oil Refining Co., which operates a 160,000 bbl.-per-day Puerto Rico refinery, for $650 million. And last week it was completing plans to build a 100,000 bbl.-per-day refinery in Alaska, as well as sewing up the rights to 75,000 bbl. per day of North Slope crude.

Charter in many ways epitomizes the oil companies that President Carter has railed against for plowing oil profits into non-energy-related investments like hotels and department stores, which are totally unrelated to U.S. energy needs. Oil provided 95% of company profits in 1979, but earlier this year the firm used some of that money to pay a rumored $35 million for the ailing Philadelphia Bulletin (circ. 462,000).

Such acquisitions fit well with the business philosophy of the freewheeling Mason. Says he: "We believe that the Lord has the world constructed so that if you do 51% of things right, you'll be a great success." Mason can afford to say that. Last year his profits increased an incredible 1468%, to $365 million on revenues of $4.3 billion.

Mason runs his business from an elegant boathouse office on the St. Johns River in Jacksonville, Fla., where the self-described "frustrated hermit" can survey both his flourishing accounts and his lush 75-acre estate. Starting out with a motley collection of Florida mortgage, banking and land-developing firms, Mason in 1968 bought 60 small gas stations that eventually led to his acquiring $70 million worth of key Signal Oil & Gas properties two years later. From 1969 to 1974 Charter assets jumped 1184%, as the voracious Mason gobbled up other properties, including Ladies' Home Journal and Redbook magazines and Louisiana and Southern Life Insurance.

But in 1975 trouble struck. The value of Charter's real estate holdings plunged; the magazines stagnated; the company's Venezuelan oilfields were nationalized. Profits plummeted 86%. Mason halted his buying splurge, sold off some land, eventually closed such losers as WomenSports, a magazine launched by Tennis Star Billie Jean King and her husband, and merged American Home with Redbook. Out of that reorganization emerged the present Gaul-like structure of three parts.

The real goal of Mason's reorganization, though, was to get Charter into shape for more oil acquisitions. In 1979 he bought Carey Energy Corp., which was mired in lawsuits and $485 million in debt, from Edward Carey, the brother of New York Governor Hugh Carey. The deal cost Charter only $4 million in cash and pushed it into the ranks of the top 20 oil companies. Last year it accounted for more than 80% of the firm's profit.

Not all of Charter's holdings fit into the troika. Mason also owns an Oregon "aquaculture" subsidiary for salmon ranching, and has begun manufacturing a machine that unloads boxcars at ports. Because Charter is known for eclectic holdings, the company daily receives proposals for ventures that range from Montana gold mines to biorhythm techniques. Mason is considering "four or five" more new deals, including buying a railroad. Stock analysts fear that some of these far-flung adventures could cause the company to stumble again, as it did in 1975. But for now the high price of oil is paying for additions to the Charter conglomerate.

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