Sir James Goldsmith: The Corporate Raider Who Got the Big Things Right.
The standard account is that they were predators. The more accurate account is that the companies they targeted were worth more than management was delivering, and someone was eventually going to make that visible. These are the thirteen men who did.
Introduction
The word “raider” was not invented by a journalist or a regulator. It was invented by the boards of directors who received the phone call. Its function is not descriptive. Its function is to make the person on the other end of the call sound like a threat before anyone has evaluated whether the call is correct. Most of the time, the call was correct.
Every company on this list had a management problem before the raider arrived. The raider did not create the problem. He made it expensive to leave in place. What follows is a plain account of what each man actually did, anchored to the specific numbers and outcomes the record supports, not to the reputation the target’s board spent money building. The mechanics behind each move, the share accumulation, the proxy fights, the leveraged structures, are covered in more detail in a separate piece on what a corporate raider actually does.
The Pioneers
Two of the thirteen were doing this before the decade that made it famous. Understanding them first matters because the standard history places the origin of corporate raiding in the 1980s, which is wrong by roughly twenty years.
Meshulam Riklis
Riklis was born in Istanbul in 1923, raised in Tel Aviv, and arrived in the United States in 1947. He is sometimes credited with originating the leveraged buyout structure in the late 1950s and early 1960s, which makes him an earlier and less celebrated figure than the men whose names appear in most accounts of this era. His vehicle was Rapid-American Corporation, built through its renamed form Glen Alden Corp, and he used it to execute a succession of acquisitions that most of his contemporaries did not believe were financeable.
The list of what he owned at his peak includes International Playtex (by 1970), Elizabeth Arden, Fabergé Cosmetics, Samsonite, the Riviera Hotel and Casino in Las Vegas, RKO-Stanley Warner Theatres, Schenley Industries (then the American distributor of Dewar’s whisky, acquired in 1968 and sold to Guinness in 1987 for $480 million), and dozens of others. He acquired Fabergé’s cosmetics divisions in 1984 for $180 million and sold them to Unilever in 1989 for $1.55 billion. After his financial empire was established, he returned to Ohio State to finish his master’s degree in Finance. His thesis was titled Expansion through Financial Management and was based on his own career. The degree was honorary only in the sense that no one had previously written a thesis about building an empire and then submitted the empire as evidence.
Victor Posner
Posner was born in Baltimore in 1918. His 1969 hostile takeover of Sharon Steel Corporation via DWG Corporation is among the earliest on record in the United States. Some sources credit him with coining the term “leveraged buyout.” He built a portfolio that included Arby’s and Royal Crown Cola. Sharon Steel filed for bankruptcy in April 1987, and a court removed Posner as chairman in 1988, citing gross mismanagement. In September 1988 he pleaded no contest to ten counts of tax fraud and was sentenced to community service.
The 1980s Cohort
The following ten operated in the decade that made the practice famous, financed it, and in several cases redefined what a hostile offer could accomplish against a company that had run out of reasons to justify its own share price.
Carl Icahn
On May 11, 1985, Icahn filed an SEC disclosure showing a 20.5% stake in Trans World Airlines. The airline’s pilots’ union backed him over the alternative bidder, Frank Lorenzo, who had voided Continental Airlines’ union contracts through a strategic bankruptcy two years earlier. The pilots gave Icahn 30% wage concessions. The machinists gave 15%. The TWA board accepted $24 per share in August 1985. He took the airline fully private in 1988, controlling 90% of the stock. He made $469 million on the transaction. He left TWA with $540 million in debt. In 1991 he sold TWA’s London routes to American Airlines for $445 million. The airline filed for bankruptcy in 1992.
TWA was not the only target. In October 1986, he launched an $8 billion hostile takeover attempt for 89% of U.S. Steel. The company’s board rejected it. He eventually sold his U.S. Steel stake in 1991 for $1 billion, a $200 million profit. In June 1989, he sold a Texaco stake for $2 billion, a $700 million profit on that position alone.
T. Boone Pickens
Pickens founded Mesa Petroleum in 1954. His 1982 attempt on Cities Service, a company six times Mesa’s size, ended when Occidental Petroleum won it at $4 billion. Mesa netted $30 million on its shares. His 1984 Gulf Oil campaign built Mesa’s stake to 11%. Gulf’s board accepted Chevron as a white knight for $13.2 billion. Pickens and his investor group netted approximately $404 million from their Gulf stake. His 1985 Unocal campaign, in which he disclosed a 7.9% stake and later increased it to around 13.6%, produced the landmark Delaware court ruling in Unocal Corp. v. Mesa Petroleum Co., which set the legal standard for board defenses against hostile bids. He failed to acquire any of the major oil companies he targeted. Every campaign was profitable for Mesa’s shareholders.
Sir James Goldsmith
In 1985, Goldsmith launched and completed a hostile takeover of Crown Zellerbach, a major American paper company. In 1986, he built a 12.5% stake in Goodyear Tire and Rubber. Goodyear paid him to exit. He operated across the Atlantic before that framing had a recognized name for it. A fuller account of his record and his particular way of reading the world earlier than most is at the dedicated piece on Goldsmith.
Saul Steinberg
In 1984, Steinberg accumulated over 12% of Walt Disney Productions, announced plans to acquire 49%, and accepted a payment of $70.33 per share for his 4.19 million shares, close to $300 million in total, against a market price of $54.25. The premium his position extracted above market price helped fix the term “greenmail” in the financial vocabulary. Drexel Burnham Lambert, which had financed the bid, later paid $45 million to Disney shareholders who sued over the payment. Steinberg had earlier attempted a takeover of Chemical Bank in 1969, which the banking establishment beat back. His holding company, Reliance Insurance, filed for bankruptcy in 2000.
Irwin Jacobs
Jacobs operated out of Minneapolis. Through the 1980s he built and sold significant greenmail positions in Avco, Kaiser Industries, and Walt Disney. His Disney position overlapped with Steinberg’s 1984 campaign. Both men sold. Both collected premiums above the market price. The boards that paid described the experience one way. The shareholders who received the share price appreciation from the bidding pressure described it another way.
Ron Perelman
His holding company MacAndrews & Forbes acquired Revlon in a hostile takeover in 1985 for approximately $1.8 billion, financed by Michael Milken’s junk bonds. In early 1989, he bought Marvel Entertainment from New World Pictures for $82.5 million. He took Marvel public and expanded it aggressively through a series of acquisitions: trading card companies, a sticker business, a distribution operation. The total cost of those additions reached approximately $700 million. Marvel filed for bankruptcy on December 27, 1996, listing assets of roughly $1.3 billion against $1.2 billion in liabilities. Marvel exited bankruptcy in October 1998. Revlon itself filed for Chapter 11 in 2022.
Nelson Peltz
In the early 1980s, Peltz’s Triangle Industries acquired National Can Corporation in 1985 and American Can’s packaging division in 1986, assembling what became the world’s largest packaging company and a Fortune 100 industrial firm. In February 2017, his Trian Partners disclosed a $3.5 billion stake in Procter & Gamble and nominated him for a single board seat. The proxy contest that followed was the largest and most expensive in United States corporate history, with combined spending by both sides estimated above $60 million. In the initial October 2017 shareholder vote, P&G claimed a narrow victory. A recount by independent inspector IVS Associates in November 2017 showed Peltz had won by approximately 43,000 votes. Procter & Gamble appointed him to the board on December 18, 2017.
Henry Kravis
Kravis co-founded Kohlberg Kravis Roberts (KKR) in 1976 with Jerome Kohlberg Jr. and George Roberts. The firm’s 1988 acquisition of RJR Nabisco for approximately $24.88 billion was the largest leveraged buyout in history at the time. The bidding war that produced it began when the company’s own management proposed a buyout at $75 per share. It ended with KKR’s winning offer of approximately $109 per share. The fees paid to bankers and lawyers involved exceeded $700 million. Bryan Burrough and John Helyar documented the transaction in “Barbarians at the Gate,” published by Harper and Row in 1989. KKR divested its remaining RJR Nabisco holdings in early 1995 at an overall loss on the deal.
Lord James Hanson
Hanson co-founded Hanson Trust in 1964 with Gordon White. In 1986, the firm acquired Imperial Group, the British conglomerate whose holdings included Imperial Tobacco, Courage brewery, and Golden Wonder crisps, for £2.5 billion, then the largest takeover in British corporate history. The morning the deal closed, Imperial Group’s pension trustees shut the pension fund, denying Hanson the cash-rich asset he had planned to use as part of the transaction consideration. He sold virtually all of Imperial Group’s non-tobacco subsidiaries and retained a business running at nearly 50% operating margin. He earned the nickname “Lord Moneybags.” Hanson Trust demerged into four independent companies in 1996: the Energy Group, Millennium Chemicals, Imperial Tobacco, and Hanson plc.
Vincent Bolloré
Bolloré was born in France in 1952. In 1981, at twenty-nine, he bought back his family’s nearly bankrupt paper business from the investment group Edmond de Rothschild for one franc and rebuilt it through debt restructuring and diversification. His method for expanding beyond the family base was consistent: build a minority stake through patient accumulation, take board seats, apply pressure on management, and either complete the takeover or sell at a premium. In the 1990s he ran this approach against Bouygues, the construction conglomerate, and against the investment bank Lazard. Both failed. Both were profitable.
In 2004 he began acquiring shares in Havas, the French advertising and communications group. By 2005 he had reached 22% and executed a boardroom coup, removing the chairman and CEO. The takeover was valued at approximately €1.9 billion.
The Man Who Financed Most of It
Michael Milken
Milken ran the high-yield bond department at Drexel Burnham Lambert. His compensation there exceeded $1 billion over four years in the late 1980s, a record for United States income at the time. The junk bond market he built reached approximately $150 billion by the end of the decade. Without his financing, most of the 1985 to 1989 transactions listed above could not have been assembled at the scale they were. A federal grand jury indicted him on 98 counts of racketeering and securities fraud in March 1989. He reached a plea bargain in April 1990, pleading guilty to six felony counts of securities and reporting violations, not racketeering or insider trading. In November 1990, he was sentenced to ten years in prison, fined $600 million, and permanently barred from the securities industry. The sentence was later reduced. He served approximately 22 months. Drexel Burnham Lambert filed for bankruptcy in 1990, the year of his plea. He received a full presidential pardon in February 2020.
Conclusion
The era that produced this list did not end because the underlying logic was wrong. It ended when the credit that financed it collapsed and the regulatory environment added enough friction to slow the accumulation of large public stakes. How corporate raiding rose, peaked, and got rebranded is covered in a separate piece. The short version is that the tactics continued and the label changed. What is called activist investing today is a version of what most of the men above were doing, with less leverage and a board seat in place of a hostile offer. Whether the corporate raider still exists is a question almost entirely about which word you are willing to use.
