Your Money or Your Company

Walt Disney Productions and St. Regis Corp., the forest-products firm, have both been victims of greenmail. In a greenmail ploy, an investor buys enough stock in a company to pose a takeover threat in hopes that the firm's officers will buy him out at a premium. Disney paid $297.4 million in June for shares held by Financier Saul Steinberg, who made a quick $32 million profit. St. Regis has been greenmailed twice, first by Sir James Goldsmith, the British industrialist, and then by Loews Corp., the hotel and movie-theater company.

Last week Disney and St. Regis faced the fact that greenmail is like blackmail: a company that pays once merely invites new demands. Australian Publisher Rupert Murdoch, who owns 5.6% of St. Regis, said that he was raising $757 million to buy 50.1%. Meanwhile, a group of investors headed by Financier Irwin Jacobs revealed that it had bought 5.8% of Disney and wanted more. St. Regis and Disney took no immediate action in response to the moves by Murdoch and Jacobs. The companies will surely think twice before paying more greenmail.