Merge Ahead

Thirty years after he was ousted from Dallas-based LTV, James Ling is still searching for the next big thing. Should we be bullish on his latest deal?

The building once known as the LTV Tower still stands out on the Dallas skyline. The high-rise has long since changed its name—it's now the 1600 Pacific Building—and it is no longer as prominent as it used to be. Newer skyscrapers have overshadowed it. The same might be said for James Ling, the onetime driving force of Ling-Temco-Vought. Today his headquarters are located in an unassuming suburban complex in North Dallas. The four-room suite contains just a few mementos of Ling's past life, when he built LTV into one of the country's largest companies before the Justice Department broke it up and he was forced out: a faded Newsweek from 1967 with the headline "Jim Ling the Merger King," a plaque from the dedication of the missiles and space division of LTV Aerospace in 1968, and a sign that reads "James J. Ling . . . specializing in anti-anti-trust matters."

Ling strides out of his office, a tall man with a full head of hair marked by a touch of gray above his forehead, his 77 years revealed only by a shake in his hands and a need to hear things repeated. He tends to tell long "sea stories," as he calls them. "You familiar with the name Bedford Wynne?" he asks directly about the wealthy Dallasite and former partner, and then off he goes.

To know James Ling is to know a man who just won't quit. After being thrown out of LTV in 1970, he has spent the past three decades trying to wheel and deal his way back to prominence. His latest venture is Empiric Energy, a tiny, independent oil company he wants to build into an energy giant. In June 1999 he announced plans for his first big acquisition: J Consulting Group, which owns oil-producing properties in three states. This past April he retained an investment bank, New Jersey-based M. H. Meyerson and Company, to help him find more targets and finance their purchase. He also hired a stock promotion firm, Massachusetts-based National Financial Communications, to get the word out about his company over the Internet. "I want to jump this company to the top one hundred publicly owned energy companies in the U.S.," the ever-optimistic Ling says. "If I have my way, I'm getting it done by year's end."

Given Ling's history, there's no doubt about his sincerity. Born in Hugo, Oklahoma, about 25 miles north of Paris, Ling was the first son of a railroad fireman and a part-time schoolteacher. The railroads were dominated by Freemasons at the time, and they enlisted the help of an African American worker to taunt his father, Henry, a converted Catholic and non-member. In an altercation, Henry killed the man. He pleaded self-defense and was acquitted. After that, the family moved to nearby Ardmore, and Henry got a job working in the oil fields. But the incident plagued him so much that he soon deserted the family and checked himself into a Carmelite monastery in San Antonio. "I later tried to join the Freemasons, just to see what it was like," Ling says, "but I never got beyond the first three degrees."

When Ling was thirteen, his mother died from blood poisoning, and he was shipped off to an aunt who owned a boardinghouse in Shreveport. He attended a Catholic boys' prep school there called St. John's College but dropped out because he didn't have enough money to buy a pair of football shoes. After that, Ling eventually drifted to Dallas, and in 1944 he joined the Navy, where he studied electrical engineering. He was discharged two years later, and he returned to Dallas. With the $2,000 he made from selling a house he owned, he started Ling Electric, an electrical contracting and engineering firm.

Ling soon discovered that the way to grow his business was to sell shares of his company to public investors. In 1955 he raised money by selling 450,000 shares of stock at $2.25 a pop. To make sales he often went door-to-door and even opened a booth at the State Fair. Using that capital, as well as bank loans and proceeds from subsequent equity and debt offerings, Ling acquired eight manufacturing companies over the next four years: LM Electronics, Electronic Wire and Cable, American Microwave, United Electronics, Calidyne, Altec Companies, University Loudspeakers, and Continental Electronics Manufacturing. He then purchased two companies that had used his components to build military aircraft, Temco in 1960 and Chance Vought in 1961. The company Ling-Temco-Vought was born. As Ling basked in his success, he is reported to have said, "I don't want all the land in the world. I just want that next to mine."

But Ling's Texas two-step of acquiring Temco and Chance Vought added too much debt and incurred the wrath of antitrust regulators in the Kennedy administration. So Ling initiated what he called Project Redeployment, using military-speak that was common around the halls of LTV. He broke up the conglomerate into three parts—aerospace, military electronics, and sound systems—and then sold stock in each division to the public. It was a brilliant political and financial stroke: The move would not only get the Justice Department off his back but also raise enough money to satisfy his creditors, allow him to make more acquisitions, and still keep the three companies under LTV's thumb. Yet Ling let himself fall into a trap. It was the go-go sixties: Diversification was hot, and conglomerateurs such as ITT's Harold Geneen, Gulf and Western Industries' Charles Bluhdorn, and Ling were gods. LTV and its subsidiaries continued to borrow more money and hand out more stock to buy more companies, including Wilson and Company, a meatpacking, sporting goods, and pharmaceutical-chemicals conglomerate. Ling tried Project Redeployment again in 1967 by splitting Wilson into three public companies, which traders jokingly called Meatball, Golf Ball, and Goofball. He even made a run at the television network ABC, though its management turned him down. Ling then took his biggest bite yet: Jones and Laughlin Steel. The

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