Ron Perelman, one of the wealthiest men in America, sits down for his first ever Q&A.
Marvin R. Shanken
From the Print Edition:
Ron Perelman, Spring 95
(continued from page 15)
Shanken: I want to go back to this corporate-raider image. Obviously, the title was in vogue, so that anyone who bought a business was a corporate raider. Is there any particular reason why they threw you into the pot with all the others if you have basically stayed with the businesses that you've acquired?
Perelman: At the time I think that anyone doing a hostile deal--Revlon clearly was a hostile transaction--was termed a "raider." And we got sort of locked into that, into that timing.
Shanken: There were a few deals that you ended up walking away from or that they paid you off or bought your stock back. Were there any deals that you didn't conclude that you regret?
Perelman: There is only one deal that fell into that category of walking away from it. In others we were overbid. But there was only one transaction where we sold the stock back to the company. That was Gillette. And that was probably the deal that was the biggest disappointment.
Shanken: Because it got away or because you really believed that this was a business you could grow?
Perelman: I think it was a transaction that had fabulous potential as evidenced by the fact of what it's done. And a transaction that we desperately wanted to get accomplished and...
Shanken: Who blocked you? What happened?
Perelman: It was a New York Stock Exchange company. What happened was very interesting. We had made this tender for Gillette. The company was very aggressive in fighting to remain independent and there came a point.... The fighting didn't bother me. There came a point when their investment banker, Eric Gleacher from Morgan Stanley, who had been our investment banker in Revlon, came up to me on a Sunday morning and said they will sell a blocking preferred [a block of stock that makes it more difficult to put together a controlling percentage of stock] at 20 percent to another corporate institution. We didn't hear the name at that time. It turned out to be Ralston Purina, and we were faced on that Sunday with the prospect of fighting two corporate establishments and a different kind of capital structure. With Ralston having a 20 percent blocking preferred, that made it appear very difficult for us to get that transaction completed. During the day on Sunday I agreed to sell our stock to Ralston. Gillette came back to us in the middle of the night and said they were unable to finalize their agreement with Ralston, and would we sell the stock to [Gillette] that night? And they'll sell the stock to Ralston the next day. And I agreed to do that. Probably one of the worst decisions I've ever made. And the rest is history. They never did the deal with Ralston and remained independent.
Shanken: How big an investment was it that you sold to them?
Perelman: In dollars, probably $800 million.
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