Perelman Sets $5-Billion Limit for Unnamed Target

Revlon chairman and corporate raider Ronald O. Perelman will spend up to $5 billion to acquire a major corporation, investors were told Friday, but the target company remains a secret.

The announcement came in New York during the annual shareholders meeting of Burbank-based Compact Video, the company Perelman will use to make the acquisition.

On Friday, a representative for Perelman, Revlon Vice Chairman Howard Gittis, informed analysts and shareholders in New York that Perelman expects to be able to raise $850 million within the next two to three weeks.

Perelman spokeswoman Roanne Kulakoff said $600 million will be privately placed and $250 million will be raised through a public debt offering. Gittis said those numbers were “not hard and fast” and that Perelman may raise even more.

“They are moving awfully fast,” said one analyst. “I would bet within the next three weeks we will see the announcement of a major acquisition through Compact Video.”

For the last three months, Perelman has been selling off the assets of the diversified video concern to raise cash and use Compact Video to create a shell company for acquisitions. Perelman is chairman of Compact Video and his investment company, MacAndrews & Forbes, owns 41% of Compact stock.

Speculation on Wall Street continues that Perelman may go after Salomon Inc., parent of the troubled New York brokerage Salomon Bros. Gittis refused to comment on such speculation at the shareholders meeting.

Perelman tried to buy a 14% stake in Salomon last September but his efforts were thwarted by investor Warren E. Buffett, who eventually acquired 12% of the company. Managing Director Robert Salomon downplayed rumors even though his company adopted strict anti-takeover measures just a month ago. “We are not aware of anyone being interested in buying the company,” he said.

Perelman has retained for advice the investment banking firm of Wasserstein, Perella & Co. in New York which is headed by takeover specialists. Managing Director Robert McKeon would say only that “there are several potential targets he might be talking about.” He refused to comment further.

In filings with the U.S. Securities and Exchange Commission, Perelman said he was changing the name of Compact Video to Owens Group Inc. On Friday, Gittis said Owens had been dropped because there already are other firms with that name. Other names for Compact Video under consideration include Andrews Group Inc., Gittis said.