GOING TO BAT AGAINST ITT

By Daniel Kadlec

If ego and arrogance were virtues, there would be a lot of saints on Wall Street. The most hallowed of the lot would include the highly successful Michael Price, who oversees $26 billion at Franklin Mutual Advisers, and the equally prosperous CEO-for-rent Al Dunlap, who is doing a tour at small-appliance maker Sunbeam Corp. In a brazen display of cronyism, the two last week publicly denounced ITT Corp.'s tactics in fending off a hostile takeover by Hilton Hotels. Picture that: Price, whom FORTUNE magazine calls "the scariest s.o.b. on Wall Street," linking with Dunlap, whose endearing nicknames include "Chainsaw" and "Rambo in pinstripes." A formidable duo.

The double-barreled assault from the s.o.b. and Chainsaw is a righteous battle. ITT's own saintly CEO, Rand Araskog, put himself squarely in the line of fire by dismissing Hilton's overtures without so much as a meeting, and he is tearing apart the company in an effort to preserve his own job. The Price-Dunlap sound off is great news if you own ITT stock and don't like the way the company has been run. The two make for powerful allies, and investors have done well by them. As their nicknames suggest, Price and Dunlap don't get pushed around a lot. But their cozy relationship is worth a look. It demonstrates how influential people scratch one another's back in ways not always brought to light. I should note here that both Price, who owns $63 million of ITT stock, and Dunlap, who has no financial stake in either Hilton or ITT, strenuously deny any tag-team effort. "I didn't even know Michael owned the stock," Dunlap protests. The Price camp calls any alleged teamwork "pure fiction." But if nothing else, as Humphrey Bogart told Claude Rains in the famous last line of Casablanca, "Louis, I think this is the beginning of a beautiful friendship."

Let's just follow the bouncing ball. Price is an activist investor who has made millions buying large chunks of companies and then fomenting change to boost the stock price. He forced the merger of Chase and Chemical banks in 1995. He is currently engaged in a public battle with Dow Jones & Co. as well as ITT. And, oh, yes, little more than a year ago, Price, a 21% owner of Sunbeam, got Dunlap hired as CEO. The pay was right: Dunlap got 2.5 million stock options that, if all could be exercised today, would bring him $70 million. So when Dunlap and Price sent ITT's board separate letters on the same date, Aug. 8, demanding the same action--to let ITT shareholders vote on Hilton's $70-a-share bid--it raised a few eyebrows. Not that anything illegal had been done. But just how cozy have the two become? Remember, Dunlap has no stake in ITT. Yet his involvement is a huge boost for Price's cause. Dunlap is a lightning rod for publicity, which is one way of pressuring a board to act. Yes, it may be that Dunlap and Price just think alike. If it is more than that, we'll find out soon enough. Chainsaw's work at Sunbeam, where the stock has quadrupled, could be over soon. Will Price do a job search for him, looking no farther than his own portfolio of stocks? Now, that would be a beautiful friendship.

Daniel Kadlec is TIME's Wall Street columnist. Reach him at kadlec@time.com