Loew’s

"of investments. Larry Tisch started his business career by buying up hotels and plowing the profits into a seemingly unrelated collection of businesses: movie theaters (Loew’s), insurance (CNA), cigarettes (Kent), watches (Bulova), ships, oil rigs, and finally broadcasting when he became head of CBS. The common thread that Tisch de- tected was an untapped potential to generate tons of cash. He had no all-encompassing corporate profile in mind as he built his holdings. For Larry Tisch, the game was business and the cash at the end of the day was how you kept score."

"operated. In fact, their interest—both financial and intellectual—in other enterprises was beginning to win them invitations to serve as outside directors at other companies. Within a year of gaining control of Loew’s, for example, Larry would join the boards of Sun Chemical Co., Sterling Bank & Trust Co. of New York, and Fulton Industries, a collection of industrial concerns."

"profit. That worked out to a paltry 2.5 percent return on assets, about what the money would earn in a passbook savings account, and 10 percentage points below what Tisch viewed as a minimum acceptable level. Loew’s had the perfect investment profile: lots of hidden value hampered by poor management. But a stock isn’t a lot- tery ticket; it’s a business. Once an investor like Tisch gets his foot in the door, he aims to see it run like a business and will happily do it himself, if necessary."

"His Commercial Credit offer was set up so that the dividend on the shares he bought, combined with the tax benefits, would give Loew’s a profit, no matter what the outcome. Here’s how it worked. If his tender offer succeeded, he would be buying the shares of a company that paid a large dividend—$1.80 a share. He would use the dividends to cover the interest payments on the money he had bor- rowed to buy the shares. The effective tax rate on the dividends, since they would be paid to another corporation, Loew’s, would be just 7.5 percent. That meant the after-tax value of the dividend payments to Loew’s would be $1.66 a share. Meanwhile, the interest on the money to be borrowed for the acquisition would work out to $2.47 a share, all of which would be tax-deductible against Loew’s income, resulting in"

"The Tisch family now had an estimated net worth of $65 million; its enterprises generated annual profit of more than $6 million. By May 1960, the Tisches had gained management control of Loew’s, named five new directors, and let it be known the company had $50 million"