Introduction of Corporate Takeover (00:56)
Fred Friendly introduces the topic of ethics and the impact of a corporate takeover through a case study discussed by a moderator and panel of professionals.
Corporate Takeover and Media (06:00)
Moderator Lewis Kaden plays Harry Oldman who has an expensive hypersonic airplane project. Oldman has a stroke, should the reporter be told in a scheduled interview? Most panelists agree the partners should know about Oldman’s health, but the reporter does not need details. No one should lie because it could lead to legal and credibility problems.
Impact on Shareholders (08:25)
Kaden asks panel members about the ethics of getting information about Oldman’s health and purchasing stock in the company. Most panel members agree that the information should be given to shareholders. If someone buys stock with information about Harry’s health, the SEC might investigate.
Two Types of Businesses (04:21)
Kaden asks why the panel members are in business. Sir James Goldsmith and T. Boone Pickens Jr. agree the purpose is making money. Investments can be made in startups or someone else’s mistake that needs to be fixed. Goldsmith states there are only takeovers of companies that need something, and well-managed companies are not taken over by force.
Community and Investment Bankers (04:01)
Kaden poses two questions: how business owners view employees or small shareholders and the purpose of investment bankers. Pickens cares about those people; he looks at the history of the town and might acquire a company because he was pushed into it. Drexel H. Joseph explains that the investment banker analyzes businesses, brings them to investors, and helps to make a business successful.
Takeover's Impact on Market (08:31)
Kaden talks about taking over a company, the affect it has on the market, and the ethics surrounding it. Liman says that trade on the basis of one’s intentions is not insider trading even if it affects the market as long as investors are following the rules. Robert Mercer and James Bere state that before accepting an offer, information needs to go to the board of directors.
Board Members' Obligation (07:36)
Kaden asks what would happen at a board meeting if there was an offer for a company and whose interests would be protected? Harrison J. Goldin, Joseph Flom, and Warren Buffett agree the first obligation is to shareholders. Timothy Wirth says the board should also protect the community; Arthur Liman does not see how the board can protect the interests of the community and the shareholders.
Shareholders and Community (06:32)
Buffett notes that if the business is selling, shareholders will change quickly because professional investors will be the owners for a short time. This can be counteracted by recasting a company, buying more shares, or having an auction. Wirth and Mercer assert that reinvestment is necessary for Americans to maintain an economic base.
Community or Company (09:30)
John H. Gutfreund, Mercer, and Epstein agree that Oldman would get voted out by board members if he does not agree with selling the company. Some say choices must be made even if they are not good for the community.
Credits: Anatomy of a Corporate Takeover (00:43)
Credits: Anatomy of a Corporate Takeover
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