Group MacAndrews & Forbes & Co. was founded in 1850 by Edward MacAndrews and William Forbes, a distributor of licorice extract and chocolate. In 1978, Perelman purchased a 40% stake in Cohen-Hatfield Jewelers, and in 1980, Perelman, through Cohen-Hatfield Jewelers, bought MacAndrews & Forbes & Co. Through the purchase, Cohen-Hatfield Jewelers was merged into what became MacAndrews & Forbes Group Inc.
Holdings In 1983, Perelman formed MacAndrews & Forbes Holdings, Inc. Perelman started selling bonds to acquire the remaining 66% stake in MacAndrews & Forbes Group Inc. to take MacAndrews & Forbes Group Inc. private. Also in 1983, MacAndrews acquired
Technicolor Inc. Despite the bond debt, in 1984, MacAndrews & Forbes purchased
Consolidated Cigar Holdings Ltd. from
Gulf & Western Industries, in addition to Video Corporation of America. It was purchased through a
golden parachute deal that was negotiated with
David Charnay's Acquisition and
Ronald Perelman after Charnay was notified of stock purchases made by Perelman in 1989. In 1989, Perelman also acquired
New World Entertainment with Four Star becoming a division of New World as part of the transaction. After
Compact shut down, its remaining assets, including
Four Star International, were folded into MacAndrews & Forbes. By the end of 1989, MacAndrews refinanced the holding companies'
junk bonds for standard bank loans. The bulk of
New World's film and home video holdings were sold in January 1990 to Trans-Atlantic Pictures, a newly formed production company founded by a consortium of former New World executives.
Revlon Group MacAndrews next purchased
Pantry Pride Inc., in June 1985. Its three retail supermarket chains were sold off within months. After the acquisition, Perelman had Revlon sell four of its divisions: Two were sold for $1 billion, the Vision Care division was sold for $574 million, and, in 1988, the National Health Laboratories division became a publicly owned corporation. Additional makeup lines were purchased for Revlon:
Max Factor in 1987 and Betrix in 1989 (they were later sold to
Procter & Gamble, in 1991). and injecting millions of dollars into the company, Revlon was unable to turn a profit for several years. As of the first quarter of 2007, it had had one profitable quarter in the previous 32. By 2012, Revlon was rebounding, and its net income had grown to $51.5 million. As of April 2014, Revlon was trading at $25.45 per share, rising from a low of $1.20 per share in 2007. A major cause of Revlon's financial problems was the debt load stemming from Perelman's purchase of the company.
Gillette, Four Star, and the late eighties In 1986, Ronald Perelman made several attempts on behalf of MacAndrews & Forbes to take-over
Gillette Company, offering $4.12 billion, and eventually $5.7 billion. In October 1987, Perelman withdrew the last offer. In 1988, Consolidated Cigar was sold. Attempted take overs were targeted at
CPC International. Ronald Perelman's controlling buyout of
Compact Video was in 1986.
Four Star International was purchased through a
golden parachute deal that was negotiated with David Charnay's acquisition and Ronald Perelman after Charnay was notified of stock purchases made by Perelman in 1989. After Compact Video shut down, its remaining assets, including Four Star International, were folded into MacAndrews & Forbes. By the end of 1989, MacAndrews refinanced the Holding companies'
junk bonds for standard bank loans. The five banks originally operated as a single entity named
First Texas Bank, but the name changed to First Gibraltar after about a week. Perelman's turn-around manifested as trimming the payroll, selling branches, and dumping of $2.5 billion of underperforming assets. In 1990, Perelman added San Antonio Savings Association and Sooner Federal to First Gibraltar for $10.1 million and $5.1 million, respectively. The purchase of San Antonio added $1.1 billion of healthy assets, $1.2 billion unhealthy assets, and a $1.3 billion government cash advance to Perelman's larder while Sooner only provided $1.2 billion in assets along with the typical government guarantees. Sooner Federal was not only the last S&L Perelman bought, but the first he sold; In August 1992, he sold the pieces of Sooner to Bank of Oklahoma and
Fourth Financial Corporation for $31.4 million. He renamed the four branches First Madison. It's unclear how much money Perelman made from his savings & loan deals, but it's estimated that he made anywhere from $600 million to $1.2 billion with most of the profits manifesting as tax breaks elsewhere in his empire. Perelman jumped back into the savings & loan game in a big way in 1994 by buying First Nationwide from the
Ford Motor Company for $664 million. Ford held onto $1.8 billion of First Nationwide's assets valued at $444 million, two-thirds of which were considered troubled assets, Perelman quickly boosted its portfolio, adding $10 billion worth of mortgages in exchange for a $175 million payment to
Resolution Trust Corporation. Before 1995 ended, Perelman added two more thrifts to his collective: SFFed's $4.1 billion of assets for $250 million and Home Federal Financial's $735 million of assets and $662 million of deposits for $70.6 million. Just as quickly as he added assets, branches, and deposits in California, he dumped what he had elsewhere in the country. In 1995 alone he sold off 79 branches with $4.3 billion in deposits spread out across five states. 1996 went a little slower, but not eventfully. He acquired
California Federal Bancorp for $1.2 billion, creating the 4th largest thrift in the country with $32.3 billion in assets. In 1997, another $3.3 billion in mortgages were added courtesy of WMC Mortgage but it was an otherwise quiet year for First Nationwide. In 1998, Perelman negotiated a stock swap with Golden State Bancorp to create the third largest thrift in the country with $50 billion of assets. The deal left Golden State's shareholders the majority, but Perelman's camp still controlled the company. Everything remained quiet until May 2002 when
Citigroup announced plans to buy Golden State for $5.8 billion, but ultimately reduced the offer to $4.9 billion due to a stock drop. Citigroup's final offer was 0.821 shares of Citigroup common stock and $7.47 cash for every share of Golden State exchanged, which converted Perelman's 43 million shares of Golden State into $321,210,000 in cash plus 36,124,000 shares of Citigroup. All things considered, Perelman expected to make about $2 billion off the deal, but because he had quasi-sold many of his shares in the past, he probably gained substantially less than that.
Andrews Group Andrews Group, Inc. was formed from the corporate shell of the former Compact Video. Andrews Group purchased
Marvel Entertainment Group, Inc. in 1989 and later its former parent company
New World Entertainment, Inc. In 1989, Andrews Group lost $14.8 million with a negative net worth of $10 million. At this time, MacAndrews & Forbes owned 57%. In 1991, Marvel Entertainment Group, Inc. went public with 30% sold to the public. Andrews Group bought: •
Fleer – September 1992 •
Toy Biz, Inc. – 46% Stake – 1993 •
SCI Television – 54% Stake – 1993 •
Genesis Entertainment – 50% Stake – Part of
New World Entertainment.
Rupert Murdoch bought complete control of New World Communications for $3 billion, giving Perelman a large profit from the sale.
Meridian Sports Holdings Also in 1989, MacAndrews & Forbes acquired The
Coleman Company, Inc., maker of stoves, lanterns, and camping and other recreational equipment, for $545 million. Perelman reduced the debt for this purchase by selling the heating and air-conditioning divisions. By the end of 1990 he had sold everything except Coleman's camping equipment and boat businesses, plus added power tool and recreational vehicle businesses. Between 1993 and late 1995 he bought seven more companies for Coleman. It took until March 2 for them to finally come to an agreement: Perelman sold his entire stake (82%) in Coleman to Al Dunlap in exchange for $1.5 billion in cash and $680 million of Sunbeam stock. They completed the deal on March 30, despite a sell-off triggering press release from March 19 that said Sunbeam would not meet sales expectations. On April 3, another press release took Sunbeam's stock from bad to worse: It would not only fall short of sales expectations for that quarter, but it would barely meet the sales expectations of two years ago. The stock went into a tail spin, falling from $54 a share to $24 a share in a matter of weeks and continued its downward spiral in the following weeks. Perelman bought control of Sunbeam in an effort to salvage the situation but it was for naught. The company had to file for bankruptcy within three years.
Morgan Stanley On February 17, 2005, Perelman filed a lawsuit against
Morgan Stanley. Two facts were at issue: Did Morgan Stanley know about the problems with Sunbeam and was Ronald Perelman misled? During the discovery phase, the judge became exasperated with what she perceived as deliberate stonewalling on the part of Morgan Stanley and ordered the jury to assume Morgan Stanley deliberately and knowingly defrauded Perelman. Hobbled, Morgan Stanley had no choice but to argue that Perelman was too savvy an investor to have fallen for their transparent tricks. After a five-week trial, the jury deliberated for two days, found in favor of Perelman, and awarded him $1.45 billion. The damages stung particularly because Morgan Stanley passed up Perelman's offer to settle the case for $20 million. Morgan Stanley maintained that the court case was improperly decided, citing the judge's decision to use Florida law over New York law and her decision to order the jury to consider Morgan Stanley guilty before the trial began. In 2007, the courts of appeal reversed the judgement. The judges' declared Perelman hadn't provided any evidence showing he'd suffered any actual damage as a result of Morgan Stanley's actions. Perelman appealed, but found himself shot down by the
Florida Supreme Court who dismissed it in a 5–0 decision. Undeterred even after that setback, Perelman went back to the trial court and asked for the case to be reopened because the hiding of email evidence was "a classic example of fraud on the court". The trial court rejected his arguments, but as of January 2009, he is beseeching Florida's 4th Circuit to reopen the case.
SPAC In 2007, Perelman filed the paperwork for a
SPAC (Special Purpose Acquisition Company) called MAFS Acquisition through his holding company MacAndrews & Forbes Holdings. A SPAC is a company founded solely for the purpose of buying out another company, but without any preselected target company. In Perelman's case, the company was selling 50 million units for $10 each. The IPO was being underwritten by
Citigroup, but on December 12, 2008, a year after filing for an IPO, MAFS opted to withdraw their application for the "protection of investors". ==Subsidiaries==