Hurwitz's own words on Kaiser Takeover
Regarding the takeover of Kaiser Aluminum and Chemical Corp., here
is the section from Hurwitz's recent October 1998 testimony before the
Federal Office of Thrift Supervision administrative law court in Houston,
Texas regarding the failure of USAT:
Q. Kaiser starts in late '87 and goes on into '88?
A. It does.
Q. Tell us about how that acquisition occurred.
A. In 1987 when the stock market had its crash, the
next day on the front page of the Wall Street Journal, it said that Kaiser
Aluminum shares had gone from $22 a share, I think, to $8 a share and that
a fellow from London named Allen -- no, he's from Switzerland -- Allen
Clore had owned a big position in it. And I think it was at 28 percent
or something. And he was the new chairman and that his shares were
going to have to be sold and --
Q. Because of the stock market drop?
A. Yes. And he was getting margin calls. The journal article said that PaineWebber, an investment banking firm in New York, was going to handle this transaction for him and that the head of investment banking, a guy named Langhorne Reed,III, was handling the transaction. And I called Mr. Reed, Lang Reed, on the phone. And I went to New York and met with him and ultimately met with Mr. Clore. He had come to the United States.
And some three months later, we had purchased his shares. It was with some Swiss banks, and it was complicated.
Q. All right. But that's just 28 percent?
A. Yes. Then what happened, the board of directors wanted to put the entire company up for sale.
Q. Again, we're talking about the Kaiser board?
A. The Kaiser board.
Q. Not your board?
A. Right. And there was a meeting at one of the major New York law firms -- Cravath, Swain -- on a Sunday. And they asked for bids, and there were two groups that bid on it. And we were the high bidder; so, then we bought the rest of the shares.
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