Scrimmage across the board-room table

CORPORATE raiders are not to be confused with the football players of the somewhat similar name, the Los Angeles Raiders. What is increasingly clear, however, is that they share many of the same attributes: aggressiveness, inventiveness -- and the ability to mow down the opposition. Still, corporate raiders, unlike the football variety, are not likely to win any ``best team'' awards these days -- at least, not on the part of company executives, although many institutional investors welcome the profit taking resulting from the efforts of raiders. In recent years, scores of corporate mergers have occurred as a direct result of takeover efforts by the so-called raiders. A House committee is looking at the economic impact of such takeover efforts, as it should.

This week's news on the Phillips Petroleum Company front underscores the reasons for concern in Congress: Phillips reached an accord with investor Carl C. Icahn that stopped a takeover effort by that New York investor, as well as earlier takeover efforts by Texas oilman T. Boone Pickens Jr. In doing so, however, Phillips paid dearly. The company will have to sell off assets worth around $2 billion to help reduce its new debt garnered in fighting the takeover bids.

What corporate raiders do, for those folks unfamiliar with the sport, is attempt to buy out as much of the stock of a company as possible -- in the process offering to pay other shareholders more than the market value of the stock -- so as to get corporate control. What happens, of course, is that in the process the raider makes a hefty profit on his stock holdings, while the company either runs up substantial debt to buy out those shares or, more often than not, seeks out a friendly merger partner along the way.

Does all this benefit the United States economy? Corporate raiders say so: Corporate leaders that are not actively boosting shareholder stock values, the raiders contend, deserve to be replaced. And mergers, they maintain, can lead to greater economic efficiency.

The other side of the coin is that hostile takeover efforts divert managements from the day-to-day direction of their companies; snap up large amounts of investment capital for merger costs; and further a concentration of industry, as has been taking place, to some extent, among oil companies.

Legislation strictly regulating raiders would not necessarily be in the public interest. Takeover efforts are not inherently bad. Surely, sloppy management, as the raiders assert, deserves to be replaced. Congress, for just such reasons, has shown a reluctance to draft legislation in this area. Still, lawmakers should not be hesitant about undertaking a thorough inquiry into the economic effects of corporate raiders on the economy itself.

At the least, the leaders of corporate America should be getting the message being sent by the corporate raiders -- about the need for US corporations to upgrade management structures so that companies are better run. To fail to upgrade management is to make a firm a sitting duck for some raider envisioning a scrimmage line somewhere as part of his personal game plan for quick profits. ------30--{et

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