Schenley Industries

Strategic Concepts & Mechanics

Strategic PatternProcess of Bites, Not Grand Plans

Decision FrameworkCash Flow Over Earnings as Debt Survival Test

Relationship LeverageHighly Confident as Substitute for Actual Capital

Capital StrategyInterest Deductibility as Leveraged Assault Fuel

Competitive AdvantageNOL as Bidding War Nuclear Option

Signature MoveSpeed-of-Sale as Debt Survival Doctrine

Signature MoveLawyer as Deal Principal, Not Hired Gun

Signature MoveParis Apartment Discipline

Signature MoveAll Debt Disguised as Equity

Cornerstone MoveBuy the Whole, Sell Everything But the Crown Jewel

Cornerstone MoveBlind Pool Before the Target Exists

Cornerstone MoveBribe the Gatekeeper, Storm the Castle

Cornerstone MoveBankruptcy's Tax Corpse as Acquisition Weapon

Competitive AdvantageTax Arbitrage as Structural Weapon

Operating PrincipleProfessional Manager Decay Across Generations

Risk DoctrineNever Cut Back a Committed Deal

Signature MoveMilken: Four-Thirty AM Cathedral-Builder With No Office

Capital StrategyVenture Capital Masquerading as Debt

Signature MovePeltz: Spittle-on-the-Check Persistence from Near-Broke

Signature MovePerelman: Borrowed $1.9M to a Boeing 727 in Seven Years

Cornerstone MoveManufactured Credibility from Thin Air

Decision FrameworkContra-Thinking as Default Mental Operating System

Identity & CultureForced Savings as Loyalty Handcuffs

Cornerstone MoveCash Flow Over Earnings as the Only Truth

Cornerstone MoveBuy the Core, Sell the Pieces, Erase the Debt

Signature MoveKingsley: Mount Everest Desk, Twenty-Year Sounding Board

Signature MoveIcahn: Wrestling-a-Ghost Negotiation Until the Last Penny

Cornerstone MoveOwner's Equity as the Non-Negotiable Discipline

Primary Evidence

"An Israeli emigrant, Riklis had started out with a stake of just $ 25,000, buying and combining small companies in the 1950s. By the time he met Milken in about 1970, Riklis controlled a conglomerate, Rapid-American, which had sales of close to $ 2 billion. It included such companies as International Playtex, Schenley Industries, Lerner Shops and RKO–Stanley Warner Theatres. What Riklis had done was acquire one company and then use its assets to acquire the next, and that company’s to acquire the next, in ever larger circles. He acquired these companies by issuing mainly bonds, or debt, in exchange for the company’s stock. As Riklis liked to say, Rapid-American owed its success to “the effective nonuse of cash.”"

Source:The Predators' Ball

"An Israeli emigrant, Riklis had started out with a stake of just $25,000, buying and combining small companies in the 1950s. By the time he met Milken in about 1970, Riklis controlled a conglomerate, Rapid-American, which had sales of close to $2 billion. It included such companies as International Playtex, Schenley Industries, Lerner Shops and RKO–Stanley Warner Theatres. What Riklis had done was acquire one company and then use its assets to acquire the next, and that company’s to acquire the next, in ever larger circles. He acquired these companies by issuing mainly bonds, or debt, in exchange for the company’s stock. As Riklis liked to say, Rapid-American owed its success to “the effective nonuse of cash.”"

Source:Predator's Ball

Appears In Volumes

The Predators' Ball Predator's Ball