Senate Banking Committee Hears Complaints : Icahn Aside, Raiders Offer Low Profile

As 16 chief executives sat before a congressional panel to complain about hostile takeovers, one of their leading antagonists, financier Carl C. Icahn, was launching a $1.6-billion bid for USAir Group Inc.

But in making the surprise offer on behalf of his Trans World Airlines, Icahn was an exception to the seemingly low profile many corporate raiders have taken so far this year.

The move underscored the slowdown in the number of highly publicized hostile takeover threats compared to late 1986, when such big corporations as Goodyear Tire & Rubber Co., Gillette Co. and USX Corp. became targets of unwelcome bids in rapid succession.

The involvement of those companies and others in takeover fights has prompted corporate executives and several legislators to complain even louder that takeover laws must be changed to curb unwanted attacks.

They contend that the raiders make the bids solely to generate stock profits and not to actually buy or run the companies.

Jacobs Dismisses Criticism

The executives made their case this week to the Senate Banking Committee, and among them was Clarence E. Johnson, chief executive of Borg-Warner Corp., which faces a takeover threat from Minneapolis financier Irwin L. Jacobs.

Jacobs dismissed the criticism on Capitol Hill and said it has no bearing on his investment decisions or on the general decline in hostile threats in early 1987.

He said in a phone interview that the decline mainly reflects the roaring stock market and the new tax laws, which have reduced the number of undervalued companies and made takeovers generally more expensive.

“The market is clearly the factor; I don’t think it’s the Washington scene,” said Jacobs, whose view has been echoed by investment bankers and other merger strategists.

In addition, the seemingly low profile of many raiders could be misleading.

They may own up to 4.9% of a company with an eye toward a takeover bid without the public knowing it. Public disclosure is required only after an investor acquires 5% of a company’s stock--a threshold corporate executives want lowered.

Raiders Retreat

Yet even when raiders have made a public move, their assaults seem more subdued relative to last year, perhaps because the surge in stock prices has altered their initial strategies and caused them to take a more cautious approach.

Jacobs, for instance, has proceeded carefully with Borg-Warner.