Tag Archives: acquisition

Other People’s Money (1991)

 “What is a business worth?” For Larry the liquidator (played by Danny DeVito) a business is worth the price of its stock, for Jorgy, the entrepreneur who inherited the New England Wire and Cable Company from his father, a business is about the people associated with it. The tension between these two perspectives- The shareholder view of financial economics and the stakeholder view of management- provides the basic story for the movie Other People’s Money (1991). Larry the liquidator is always on the lookout for good companies that he can buy and sell to make a profit. One day he comes across a small firm New England Wire and Cable Company that was ably managed by the second-generation of the founding family and was completely debt-free. When Larry’s offer to buy the company is refused by the owners, he pursues a hostile take-over. Larry’s attempts for the hostile takeover are repeatedly stalled by Kate, the step-daughter of Jorgy. Finally, the shareholders are asked to vote on whether they want to keep the company private and retain the existing management, or are willing to let Larry acquire the company so he could sell it and make a good profit for the shareholders. (You can check out a more detailed summary of the movie here.)

The movie is a romantic-comedy. It does a good job of presenting hostile takeovers and corporate acquisitions in a fun way. Companies, big and small, can be attractive targets for takeover and acquisition for a variety of reasons. The movie effectively portrays how a company which is apparently being run well (i.e. the management is honest and caring and the company is completely debt free) may be attractive to corporate raiders who can help shareholders get a better return for their money. The management of the company, like Jorgy in the movie, try their best to defend against these attacks using a number of tactics. The recent Microsoft-Yahoo story relates well to the movie. Microsoft made an offer to acquire Yahoo, but Jerry Yang the founder CEO of yahoo did not want to sell his company. He was able to stall the offer for a while, force Microsoft to make a better offer, and convince his board to finally reject the offer. However, as is well known, Yahoo’s problems are far from over. If the management of Yahoo is not able to come up with a plan to strategically redefine and reposition Yahoo soon (as Jorgy’s step-daughter was able to do in the movie), the days of Yahoo as an independent company may very well be numbered.

The movie is certainly worth watching, especially for students and instructors interested in topics related to corporate strategy, acquisition, diversification, takeovers, and entrepreneurship.

Working Girl (1988)

workgirl.jpg Working Girl (1988) is a movie about a young women’s efforts to succeed in the brokerage industry where men are bosses and women are secretaries. Melanie Griffith plays a secretary who has the ambition and drive to succeed, but finds all the cards stacked up against her. Her male bosses don’t take her seriously, and things don’t improve even when she is assigned to a female boss. She has a good idea for an acquisition, which her new boss steals and tries to pitch as her own. Of course, like with all Hollywood movies the good wins over the evil, the hard-working people succeed and the dishonest and unethical find themselves defeated.

Most people like to think that if you work hard, success will come. The movie does a realistic job portraying how most people usually remain trapped in the socio-economic strata in which they were born. It is really hard to break free and move up when most other forces are working to keep you where you were. Of course, Hollywood movies do an efficient and effective job of taking you from you are to where you want to be.

The movie is definitely worth watching!