Mergers, acquisitions, buyouts, and spin offs all have two things in common: winners and losers.
Financial disputes, of course, don’t often make the news. It’s only when celebrities become involved, or the size of the deal becomes news-worthy in itself, that the general public starts to take notice. That’s when feuds end up in the court of public opinion, with dealmakers forced to air their dirty laundry.
Here are three of the best publicized feuds between dealmakers in recent memory:
1. George Clooney vs. Dan Loeb
The arena: Letters and the red carpet
The fight: Should Sony spin off its entertainment division?
Dan Loeb is known to be an activist investor with a sharp tongue and sharper pen. His letters criticizing top management are legendary. To the CEO of Star Gas, he wrote that his mistakes, “…have led us to dub you one of the most dangerous and incompetent executives in America.” Ouch.
In November 2013, Loeb set his sights on Sony. Citing disastrous revenues for the films “After Earth” and “White House Down,” he called for Sony to spin off its film and entertainment assets, which brought down the wrath of activist actor George Clooney.
Clooney said, “A guy from a hedge fund entity is the single least qualified person to be making these kinds of judgments, and he is dangerous to our industry.” Loeb was uncharacteristically polite in his response, saying that he admired Clooney’s passion, adding “I’d love to meet him some time and talk these things out.”
The result: Parted ways
Sony largely ignored Loeb’s comments on their film business, but did spin off their failing computer and TV divisions after reporting a $1.1 billion loss. Clooney has since moved on, apparently too busy to meet with Loeb over the finer points of investment strategy.
2. Carl Icahn vs. Bill Ackman
The arena: Live on CNBC
The fight: Herbalife: Buy or sell?
Amid accusations that Herbalife is a pyramid scheme, hedge fund manager William Ackman of Pershing Square very publicly advised that the company was a bad bet in 2012. Activist investor Carl Icahn began buying stock like it was candy.
In 2013, during a live interview on CNBC’s Fast Money Halftime Report, Icahn called in when Ackman was being interviewed. The conversation immediately turned to a 10-year-old dispute over profits on a deal that went sour. Icahn called Ackman “the crybaby in the schoolyard,” and said a friend warned him “don’t deal with this guy – he’s major, major trouble.” Sticking to the metaphor, Ackman responded, “Carl is a bully….This is a guy who takes advantage of little people.”
Their dispute over Herbalife was never discussed. In fact, when CNBC host Scott Wapner tried to turn the conversation to Herbalife, Icahn snapped, “I’m not going to talk about my Herbalife position just because you want to bully me….I don’t care what you want to know. I’m going to talk about what I want to talk about. I’m never going on a show with you again, that’s for damn sure.” Ackman summed up the expletive-filled on-air feud with, “Carl, we’re wasting the world’s time on this thing.”
Here’s the highlights from that infamous phone call:
The result: Patched it up
The market has proven Icahn right, so far. Although the FTC is currently investigating Herbalife, its stock continues to perform. Tempers run high on Wall Street, so few insiders were surprised when Icahn and Ackman hugged each other onstage at the CNBC Delivering Alpha Conference in New York this summer. Host Scott Wapner even printed t-shirts for the occasion. Ackman called Icahn “thoughtful and supportive.” Icahn responded, “I respect Bill. It’s blessed to forgive.”
3. Kenneth Irving vs. The Family Trust
The arena: The Wall Street Journal
The fight: Is vertical integration becoming obsolete in the oil industry?
When people say “oil-producing country,” Canada doesn’t usually spring to mind, yet Canada is America’s #1 oil supplier and 75 percent of that oil comes through Irving Oil facilities. The Irving Oil conglomerate has a history of buying up its supply chain and keeping lucrative contracts in the family, but it is now in the throes of an ugly family feud over the future of the company.
In 2010, Kenneth Irving, grandson of business tycoon K.C. Irving, left his post at the helm of Irving Oil after a Shakespearean feud with his father, Arthur Irving Senior. At issue was whether Irving Oil should diversify and start investing in the larger market. In 2008, Arthur Sr. handed over the reigns of the company to Kenneth, who led an attempt to build a $7 billion refinery with BP PLC. However, the idea was abandoned in 2009 as the global economy cratered. To the surprise of many senior employees, Arthur Sr. returned to Irving Oil and began to get involved in company decision-making again. To make matters worse, in 2011, the FTC rejected Irving’s acquisition of ExxonMobil assets in Maine.
Around the same time, a battle erupted among the wider family in a Bermuda court, with Kenneth challenging the terms of the family trust, which gave his siblings equal funds. He argued that as a senior official of the company, he had contributed more value to the trust. In 2012, he offered to drop the case if the family hosted a retirement dinner for him. According to court documents, he said, “I want to be recognized by my siblings that I did good.” Money aside, it seems that sometimes all you really need is a pat on the back.
The result: Still feuding
Kenneth Irving has left the Irving empire and now runs a digital data platform in the US. Back in Canada, and the Irving empire has splintered. In speaking of the other companies run by family members, Jim Irving, co-CEO of J.D.Irving Ltd (and Kenneth’s cousin) said, “We have no involvement with them, period. Everybody gets along, but we have reorganized the business.”