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Hawley Hale, and McGraw-Hill defeated a tender offer by American Express. It is the drubbings, rather than the huge winners, that have contributed to Wyser-Pratte's new-found celebrity. It turns out that he is a very hard loser, and he has been waging holy war on chief executives and boards of directors who manage to defeat hostile acquirers. The first object of his wrath was John C. Suerth, the chairman of Gerber. Anderson Clayton offered Suerth $32 a share in December 1976, and then made a tender offer at $40 the following April. In July, while the takeover battle was still on, Wyser-Pratte showed up at Gerber's annual meeting in Fremont, Michigan, to inquire, noisily, why Suerth was trying to prevent his shareholders from making money. Wyser-Pratte bought only a small amount of Gerber stock for Bache and thus his loss was insignificant when the takeover attempt failed, yet he still persisted in his attack. He found a shareholder in Ohio to sue Suerth and the Gerber board for violating their fiduciary duty, and Bache picked up the legal fees for the lawsuit. Wyser-Pratte says he kept after Suerth simply because he wanted to make a point. "The heavy-handedness involved here makes a mockery of free enterprise," he says. "It's incredible the lengths managements go to protect their sinecures. If companies aren't for sale at any price, they should have a surgeon general's warning to that effect. I'd like to see what would happen to their cost of capital then." Wyser-Pratte did buy a significant amount of McGraw-Hill stock after American Express made its tender offer in 1979, and he lost about $220,000. In that case, he's been trying even harder to make a point. Just after the tender offer collapsed, he joined a shareholder committee in a highly publicized attempt to poll McGraw-Hill owners on whether they wanted the board to reconsider the American Express bid. The object was to sway the board or, failing that, build ammunition for a court fight. The plan fell apart when McGraw-Hill made it clear that it would ensnare the shareholders in costly lawsuits if they persisted. But Wyser-Pratte still isn't through with McGraw Hill. He bought 100 shares of the company's stock in his own name so that he could put a proposal in its 1980 proxy statement. He wants to amend the bylaws so that the board will be required to present to the shareholders any offer, by a financially responsible entity, to buy more than forty-five percent of the stock at a fortypercent premium over the market price. The bylaw would also prohibit the directors from spending any company money to contest such an offer. "The shareholders own the company and they can read," Wyser-Pratte says in explaining his proposal. "They are capable of making their own decisions about whether to hold or sell shares." The Securities and Exchange Commission ruled that McGraw-Hill didn't have to include the proposal in its 1980 proxy statement because Wyser-Pratte bought his shares too late to be a shareholder of record on the last day for filing material. 18 Subsequent changes in the price of the stock would indicate to anyone else that the matter was closed. But not Wyser-Pratte. He is still thinking it over. Wyser-Pratte openly revels in his self-assumed role as the shareholder's protector, but his actions haven't been all that popular among other arbitrageurs. They dislike losing as much as he does, but they lick their wounds in private. In their view, the glamour of takeovers and the enormous profits they've made have already focused too much attention on the arbitrageurs, and they don't need one of their own stirring up even more trouble. Ironically, the one attracting all the publicity is the only major arbitrageur who was born into the profession. Wyser-Pratte's father, Eugene, started out in classic arbitrage in Paris and moved to New York in 1948. Guy went through grammar and high school in Westchester County and enrolled at the University of Rochester in the fall of 1958. He now looks back on the four years in Rochester as "the greening of Wyser-Pratte." The intellectual climate, he says, was a radical change from the know-nothing attitude that prevailed at his earlier schools. In addition to majoring in history, he was an original member of the University of Rochester hockey club, rising at five o'clock on winter mornings to slap pucks on the frozen Genesee. He attended Rochester on an ROTC scholarship and was the only one in his class to opt for a Marine commission instead of one in the Navy. The other variety of greening didn't begin until Wyser-Pratt left the Marine Corps in 1966. He joined his father's company, which by then had shifted from classic to risk arbitrage, and started night courses towards an M.B.A. in finance at NYU. (His thesis for the degree, which he got in 1970, was on risk arbitrage.) In 1967 he and his father sold the business to Bache and both went to work there. Guy has been in charge of the arbitrage operation since his father retired in 1971. Running the arbitrage department entails keeping a constant eye on the ticker and fielding nonstop questions from his subordinates as he makes the final decisions on the twenty to forty situations that Bache has investments in at any given time. For lagniappe, Wyser-Pratte manages investment portfolios for eight European banks. With all that, he is able to take two months off each year and spend time with his daughters, Joelle, eleven, and Danielle, seven. He also gets back to his native France four or five times a year. The allure isn't Paris, but the countryside. Wyser-Pratte would rather be walking through the vineyards and farmlands of France than anywhere else. Unless, of course, a big tender offer is in the works. A.F. Ehrbar, who received his M.B.A. from Rochester in 1974, is a senior editor at Fortune, specializing in feature articles on public policy matters.
Aaah, Cheesecake! Dana Bovbjerg promises that you, too, will go ape over his Chimpanzee Cheesecake. Turn the page for the recipe. What do cheesecakes and neuroscience have in common? Dana Bovbjerg, that's who. Bovbjerg is a former professional cook and baker who is now a graduate student in neuroscience at the University. Described as a man with "many a cheesecake under his belt," Bovbjerg, with considerable local fanfare, recently launched The Joy of Cheesecake, a new cookbook of which he is co-author. The book offers a sumptuous selection of over a hundred recipes for what he characterizes as "this most sensuous of desserts." Among them are formulae for Ginger, Apricot, Passionfruit, Snow White, Angel, Inscrutable, Lunar, William Penn's, Aunt Anita's, and an international array of Danish, Hungarian, Italian, Polish, Russian, and Swedish cheesecakes. The author has chosen the following sampling to share with Review readers. Note: These are recipes for fillings only. You're on your own for the crusts, unless you want to buy the book (published by Barron's of Woodbury, $11.95 clothbound, $9.95 paper). 19
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