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(Critical Survey of Contemporary Fiction)

Takeovers and takeover phobia have been largely responsible for fueling the unprecedented bull market of 1985 and 1986. Moira Johnston’s book focuses on personalities, strategies, and counter-strategies involved in three of the biggest corporate takeover battles in history: T. Boone Pickens versus Unocal, Sir James Goldsmith versus Crown Zellerbach, and Carl Ichan versus TWA. It is a story of outsiders against insiders, newcomers with extreme self-confidence and fresh ideas against an entrenched old boy network with power and privilege.

The new breed of financial adventurers are not unlike the robber barons of early entrepreneurial capitalism, and they may be what is needed to streamline American industry and make the economy sound again. On the other hand, there are many who fear that their kamikaze tactics may have already created a ticking bomb set to go off in the event of a major recession. Many huge companies might go bankrupt because of the unwieldy debts they have assumed for purposes of acquisition or protection. There could be a repeat of 1929 and its aftermath. Federal Reserve Chairman Paul Volcker expressed this chilling view in guarded terms when he said that all this borrowing is not “compatible over time with economic and financial stability.”

Essentially, the takeover initiators (“raiders”) create huge debts by borrowing on unsecured paper (“junk bonds”), while the takeover resistors create debts and other financial obligations (“poison pills”) to make their companies less attractive. It is an extremely complicated subject, with legal, monetary, ethical, sociological, technological, political, and many other facets. TAKEOVER provides mainly an introduction to some of the principal actors, their methods, and their lurid vocabularies (“greenmail,” “golden parachutes,” “white knights,” “shark repellent”). The author, primarily an investigative journalist, won the National Magazine Award for a story on the defective Firestone 500 tire. Her forte is reporting; she is less effective in synthesizing and interpreting her data.