Now Introducing Son of Greenmail

A trendy takeover defense

Corporations fighting off takeover bids have devised sundry exotic defenses: concocting so-called poison pills of potential debt, filing protracted lawsuits or amassing the stock of would-be acquisitors. Lately a new strategy seems to be gaining favor: paying gobs of borrowed money to all stockholders, including unwelcome suitors, in a maneuver known as recapitalization. The idea is to create a debt-burdened company less attractive to raiders. Last week both publishing giant Harcourt Brace Jovanovich (1986 revenues: $1.3 billion), of Orlando, and travel conglomerate Allegis (1986 revenues: $9.2 billion), of Elk Grove Township, Ill., made use of this shark repellent to fend off...