Dukakis Defies Liberal Label; Takes Stand with Management against "Mergermania"
Stefan Fatsis, Ap, THE JOURNAL RECORD
When Campeau Corp. bought Federated Department Stores, Dukakis asked the Federal Trade Commission to review the $6.6 billion purchase, which included Filene's Basement, the discount store where the governor buys his suits.
On the campaign trail, the Democratic presidential nominee has said ``merger-mania'' is ``tearing companies apart as if they were erector sets.'' And he has called for tougher enforcement of federal antitrust laws and regulations to protect management against takeover artists seeing to make a fast buck.
In a state where sharks circle regularly around corpoate giants such as Gillette and Polaroid Corp., Dukakis, portrayed as a liberal by his Republican opponents, has forged an alliance with management in attacking corporate raiders.
``He's very concerned about hostile takeovers that lead to protracted battles, cost jobs, might result in paying greenmail and don't create new economic value,'' said Harvard Business School Professor Rosabeth Moss Kanter.
``However, he's very well aware that there are a large number of mergers and acquisitions and some takeovers that replace weak management with stronger management or result in combinations that do create new economic value,'' the Dukakis adviser said.
Wall Street analysts acknowledge some trepidation among potential buyers over a possible Dukakis presidency. Some fear he will try to curb takeovers; others worry that a recession will dampen the merger wave, as it did after last year's stock market crash. With the future uncertain, merger activity has spurted in recent months.
``There is some basis to say that were Dukakis to win, then antitrust enforcement would be moe vigorous than under the Reagan Administration,'' said Les Fabuss, senior vice president for mergers at Shearson Lehman Hutton Inc. ``But I don't think Dukakis would be Draconian on this. He tends to be middle-of-the-road is my impression.''
Dukakis is on the record supporting measures to curb hostile takeovers, including:
- A Senate bill sponsored by Sen. William Proxmire, D-Wis., to force raiders to make their efforts more public.
- Outlawing greenmail, the premium paid by a company to buy back stock from a raider who agrees to drop a takeover bid.
- Reducing the 10-day period in which a company can acquire a block of another company's stock without disclosing whether it intends to mount a takeover.
- Stricter enforcement of antitrust and insider trading laws. …