Is Dr Octopus in hot water?

Profile: Ronald Perelman: The ruthless owner of Marvel Comics is juggling massive debts. But that's nothing new, discovers Paul Rodgers

He Might like to picture himself as Captain America, possibly even The Hulk, but in New York Ronald Perelman, owner of Marvel Comics and much else, is taking on the persona of Dr Octopus, Spiderman's arch foe.

Perelman's enemies in America's corporate world, of whom there are many, have always liked to snipe at him, but with one of his companies - Marvel - hitting the ground with a resounding "thronk", they smell blood. A column in this week's New York Observer fumed that after buying his first 60 per cent stake in Marvel the "borrowed-money billionaire... sunk his fangs into its balance sheet and gave it the same treatment that vampire bats give stray cattle on the Argentine pampas."

The virulent attack came after Perelman punched the headlines two weeks ago by announcing he was pumping an additional $350m into Marvel. It should have been welcomed. Instead it was decried by shareholders who saw their stakes diluted and by bond holders who were watching their collateral evaporate.

Perelman claims to differ from T Boone Pickens, Carl Ichan, Henry Kravis and other upstart, asset-stripping, green-mailing, corporate raiders of the 1980s because he genuinely likes running companies. Some, such as Revlon, the cosmetics company that first established him in the top rank of takeover artists, have caused him steady worries. But none have tested his managerial skills as much as Marvel.

The comic book company, bought for $82.5m in 1989, faces two problems. When the secondary market for yellowing old comics soared in the 1980s, Marvel cashed in with longer print runs on new issues to meet demand from speculators, who eventually realised that their copies were unlikely to become truly rare and bailed out. The second was labour disputes in basketball, baseball and ice hockey which hit the company's sports card business by reducing demand from games-mad boys.

Critics say the big problem for Marvel is that cost cutting has removed some of its star writers and illustrators. In any case, falling revenues left Marvel unable to service the heavy debt with which Perelman had saddled it. The company announced a post-tax loss of $12.5m this year, down from a profit of $19.6m in 1995, and its shares plummeted to less than $3 from a high of $34 three years ago.

The latest cash injection is to re-purchase Toy Biz, which sells dolls based on Marvel's 3,000 characters. Plans are also afoot to set up a chain of themed Marvel Mania restaurants with Planet Hollywood. Perelman's associates claim that nobody has been harder hit than he by the company's poor performance. True, perhaps, on paper. But Perelman has only $10m of his own money invested and his main holding company, MacAndrews and Forbes, is insulated from most of the bond holders through a series of intermediaries. Indeed, of the $550m raised to purchase Marvel, $59m went to MacAndrews and Forbes in dividends. Failure might hurt his reputation, but would not damage his wealth.

Nor would it be likely to mellow him. Throughout his 53 years, Perelman has courted conflict. As a young man he was at odds with his father over his role in the family firm, Belmont Industries, a metal fabricator in Philadelphia. Last March he avoided his son Josh's wedding because the groom refused to ask his intended to sign a pre-nuptial agreement.

Given his own marital record, Perelman's hesitation is perhaps understandable. His first wife, real estate heiress Faith Golding, divorced him in 1985 after her private investigators documented his adultery. The trophy wife that followed, gossip columnist Claudia Cohen, was dumped in 1994. He is currently separated from his third spouse, Democratic Party activist Patricia Duff, and attempting a reconciliation. All three marriages were fruitful: he now has six children.

Apart from collecting companies - and wives - the 5 feet 5 inches tycoon has few interests. Paintings by Warhol, Twombly and Modigliani have adorned the Manhattan townhouse he uses for an office, but they shared the space with tacky cushions embroidered with slogans such as "No Guts, No Glory" and "Love Me, Love My Cigar". The latter is clearly a reflection of the H Upmann cigar, made by Consolidated Cigar (which he currently owns for the second time), clamped between his jaws all day. His personality was summed up by New Yorker reporter Connie Bruck, author of The Predators' Ball, an account of the junk bond era, as "crude, brusque and humourless".

While his tastes might be questionable, his faith is not. He keeps kosher and respects the Sabbath, in keeping with his membership of the ultra- orthodox Lubavitcher sect. At a dinner earlier this year to commemorate the sect's founder, Rabbi Schneerson, he was warmly welcomed by his bearded fellow believers in their black frock coats.

In sharp contrast is his love of the limelight. Although he professes an intense sense of privacy and rarely gives interviews, he adores being seen in New York society. The board of Revlon was packed with names, including heiress Ann Getty. His three homes - in Manhattan, East Hampton and Palm Beach - have hosted the likes of Jacqueline Onassis and Calvin Klein.

Although he was in his 40s before he came to international attention, Perelman's ascent started early. His father, the son of a Lithuanian Jew, was a canny operator who used to take his son around Philadelphia when he evaluated prospective businesses. By the age of 11, Perelman is said to have been reading annual reports and balance sheets after school.

After graduating from the University of Pennsylvania with an MBA, he worked for his father, but quit when he was refused the title of president. His career as a raider began when he met Michael Milken - later a convicted criminal - at Drexel Burnham Lambert. His first deal, financed entirely by $1.9m of junk bonds, was to buy Cohen-Hatfield Industries, a jewellery company, in 1978.

A series of smallish deals followed in the early 1980s, culminating in the purchase of Technicolor, a cine film processing company. Although a court later found he had given inducements to the chairman and some board directors to support his bid, it was determined that he paid a fair price so no damages were levied. The approach was to backfire when it came time to bid for Revlon, however.

Drexel, too, was moving from success to success, proving that capital was not a scarce resource in America, and that anyone with enough gumption could barge through any boardroom door they chose. But the company lacked respectability: Perelman's bid for Revlon changed that. With Morgan Stanley and Chemical Bank backing the deal, the boy from Philly had arrived. Chief executives quivered.

The Revlon bid went hostile largely because of Perelman's abrasive personal style. His opponent at Revlon was Michel Bergerac, an urbane Frenchman who left their first meeting fuming. According to one report he said: "Can you imagine this guy, saying he's going to make me a rich man?" While Bergerac lobbied to get the blue-blood banks to withdraw, Perelman complained about Bergerac's extravagances, including a company 747 plane equipped with gun racks for when he went on safari.

It was Drexel's bottomless pockets that won the battle for Perelman, but not the war. Revlon had already been pushed from the pole position in cosmetics retailing to third place, and was being dropped by major department stores. An aggressive ad campaign and Perelman's tireless efforts restored it to the centre isles, but still its brands languished. His latest tactic has been to retreat to discount stores like Wal-Mart, aiming to regain in volume what Revlon now lacks in cachet. A flotation planned for 1992 flopped, however.

Other attempts at operational success, rather than successful financial deal-making, have also hit hitches. A bid to build a television empire, New World Communications, ran into difficulties when he switched a dozen local affiliates from staid CBS to the brash Fox network. The audience was, at best, confused. The chain is now being sold to Rupert Murdoch's News International.

Perhaps the biggest criticism of Perelman is that his conquests, founded on junk bonds, are still supported by debt. One estimate puts his debt- equity ratio as high as 18:1. Calculating the exact value is difficult because of his web of private holding companies. But Perelman insists he could wipe out his massive borrowings by selling just one of his nine major operating businesses.

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