Airlines: Blocking an Air Raid

As Charles Bluhdorn tells the story, the deal was the most natural thing in the world. While vacationing in the Bahamas last December, the chairman of Gulf & Western Industries mentioned to James Crosby, chairman of Resorts International, that he had acquired 1.8 million shares of Pan American World Airways, or 5% of the total. Crosby then made Bluhdorn an "irresistible" offer to buy 900,000 shares and got an option on the balance.

Next, Crosby learned that the Chase Manhattan Bank controlled 1,500,000 more shares of Pan Am. He invited a number of...

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