Diana B. Henriques - The White Sharks of Wall Street: Thomas Mellon Evans and the Original Corporate Raiders

PROLOGUE:
THE SECOND TIME AROUND

T he Time: An evening in the early eighties.

The Place: A soaring hall in a famous Manhattan museum, set for dinner.

The Occasion: A private party hosted by Drexel Burnham Lambert, just emerging as the leading financier of the proliferating battles for control of Americas largest corporations. Around the tables are men whose ambitions will chill the hearts of company executives, local mayors, labor leaders, and boardroom directors for years to come.

But at one table sits a man none of the celebrity-spotters recognize. He is Robert Sheldon Evans, an executive at the Crane Company, a polyglot industrial corporation whose last big headlines on Wall Street had come in the mid-seventies, when it made a bid to buy a stake in Anaconda Copper.

One of Evanss curious tablemates finally asks the question others at the table are clearly pondering. Why is he here? Where does he fit into this choreography of power?

Oh, answers the low-key man from Crane, Im standing in for my dad, Tom Evans.

The questioner still looks blank. Who is this Tom Evans?

A brief coolness, then: Well, I guess you could say, he started all this. His hand swept in the room full of strivers and acquirers, raiders and would-be raiders.

In the business world of the late fiftiesthat hazy fax-free and pre-laptop era when a round-trip to the Coast took days and takeover battles took monthsThomas Mellon Evans was a widely recognized figure. A Daddy Warbucks lookalike, he was so familiar that business writers could use his name unexplained, just as the names of investment wizard Warren Buffett and entrepreneur Donald Trump would be used decades later. He was a controversial figure as wella New Jersey congressman would later brand him the white shark and Forbes magazine called him the man in the wolf suit. Long before Drexels Michael Milken became a household name in the eighties by facilitating the use of junk bonds to finance hostile corporate takeovers, Tom Evans had used debt, cash, and the tax code to seize control of more than eighty American companies, small and large. Long before giant pension funds and other institutional investors began to lobby for shareholder rights, Tom Evans was demanding that public companies operate only for their shareholdersnot for their employees or their executives, not for their surrounding communities, but for the people who owned their stock. His view seemed selfish and harsh in the pallid institutional community of that day, but he preached it fiercely and effectively.

By 1959, Tom Evans already had become the leading practitioner of a strange new form of corporate ruthlessness, one that squeezed fat out of profitable corporations in the relentless pursuit of greater profit. By 1968, the Wall Street Journal had declared Tom Evans something of a legend for his tough methods of operating the company once he wins control. He demands prompt profit performance from both assets and men; if he doesnt get it, he sells the assets or fires the men.

Yet, despite the swath that Tom Evans cut across Americas corporate landscape in the fifties and early sixties, most of the people who poured into Wall Street in the eighties to practice M&Amergers and acquisitionshad no idea they were standing on anyones shoulders. They thought they were part of a new age, engaged in something history had never seen before. They were wrong. Everywhere they strode, Tom Evans had been there ahead of them.

Although Tom Evans came to power in the blandly conformist Eisenhower years, few of the brash raiders of the eighties could match him for daring, cunning, or sheer exuberance. In a gray-flannel culture, Evans was a dapper maverick; in an age of polite corporate statesmanship, Evans spoke his mind, fiercely and fearlessly.