Remember The '80s? Remember Peltz And May?

Like many other 1980s dealmakers, Nelson Peltz and Peter W. May found fortune and grandeur only to suffer an inglorious aftermath. It has been no fun: a nasty fight with minority shareholders over a can company they sold and the real estate-related collapse of their London buyout venture. But unlike many of their '80s compatriots', their wealth, while somewhat diminished, remains huge--Peltz's an estimated $600 million, May's some $300 million.

These resources have given the duo an opportunity to recapture at least some of their former glory. Fittingly, they plan to do so by taking over a bedraggled outfit owned by another bloodied '80s figure, Miami financier Victor Posner (table). Pending a judge's expected approval in January, Peltz and May will assume control of Posner's ailing DWG Corp., a grab bag whose most prominent units are the Arby's Inc. restaurant chain and soft-drink maker Royal Crown Cola Co. Under pressure from U.S. District Court Judge Thomas D. Lambros in Cleveland and big debt problems, Posner is relinquishing his voting control. Three court-appointed directors say Posner violated a 1990 settlement of a suit by disgruntled shareholders because he made DWG absorb expenses from other Posner entities. Posner refused a request for comment, although his attorneys have said that the charges are unfounded.

Peltz and May, both 50, believe that at DWG they will repeat their earlier successes at National Can Corp.--which, ironically, they also acquired by buying out Posner in 1985--and American Can Co. The can combine, renamed Triangle Industries Inc., was the nation's largest. By pumping in management expertise and capital spending, they made Triangle profitable, too. "We have the ingredients to do it again," insists the deep-voiced, perpetually tanned Peltz, who divides his time between his Palm Beach home and his Manhattan investment outfit, Trian Group LP.

QUICK BUCK. For Peltz and May, the chance to revitalize nationally known names, such as Arby's and RC Cola, is an intoxicating challenge. "We'll really focus on these core businesses," says May, the quieter and more operations-oriented of the two. Their ambitions are fueled by their new, young partner, Leon Kalvaria, 34, a mergers and acquisitions whiz who joined them from First Boston Corp. in early 1991. Currently, their Trian Group holdings consist of a handful of low-profile outfits, such as Equitable Bag Co., a shopping-bag maker.

The Peltz-May team is getting a big welcome from Wall Street. Since they emerged in early September as Posner's likely successors, DWG stock has almost doubled, to $14.50 per share. Says Judge Lambros in an interview: "They're smart, they're credible, they've got plans and a vision."

Still, the team's return to the limelight with DWG could revive unpleasant memories of the strife-ridden, albeit profitable, conclusion of the Triangle can episode. They took heat from shareholders then for seeming to go back on apparent avowals not to act like typical raiders and resell Triangle for a quick buck--something Peltz promises not to repeat with DWG. Peltz contends that he was in Paris bargaining to buy the canning subsidiary of French container behemoth Pechiney in 1988, when Pechiney executives surprised him with an offer for Triangle that he couldn't refuse. "I had expected Triangle would be part of my estate," he says.

BARGAIN. Triangle stockholders then sued, because Peltz and May had boosted their stake in the company from 13% to 62% several months before, allowing them to maximize their Pechiney windfall at others' expense. The suit charged Peltz and May with insider dealing, saying they either knew or should have known that the Pechiney buyout was coming. The two dealmakers denied that, protesting that Triangle stock was a bargain they couldn't pass up following the 1987 market crash. But Peltz and May ended up settling the suit for $75 million without admitting fault, splitting the cost with Pechiney.

Worse times awaited in London. In 1989, they took over Mountleigh Group PLC, a British property developer. The plan was to sell off the buildings and turn Mountleigh into a takeover vehicle for European companies. Then the British real estate market fell apart, and Mountleigh went into receivership with $900 million in debt. Trian lost $110 million on Mountleigh, and Peltz fled back home, admitting he had made a mistake.

Peltz and May likely feel a good dose of relief to be greeted as saviors at DWG. The applause could be premature. Fast food and soft drinks are cutthroat industries. Further, the Miami-based concern has gobs of debt--$405 million in long-term borrowings--and pays a horrific amount of interest on it. Part of that is because of Posner, 74, a pariah to many on Wall Street owing to his reputation for sucking companies dry through elaborate perks and other lavish spending. He has had trouble lining up conventional lending. With a 46% controlling stake in DWG at risk as the company hemorrhaged red ink, Posner turned to Cincinnati money man Carl H. Lindner's American Financial Corp. Lindner last year lent DWG $103 million at a towering 19% rate. Lindner wouldn't comment to BUSINESS WEEK either.

DEAL O.K. The mess got to be too much for the court-appointed directors. At their behest, Judge Lambros sometime in January intends to O. K. a deal whereby Peltz and May's Trian will pay Posner $72 million for half his stake. The rest will be converted to nonvoting preferred stock that Posner will continue to hold.

Peltz and May are brimming with remedies for DWG. They want to invigorate marketing of RC Cola, a perennial also-ran in the soft-drink wars. And they plan to expand the 2,600-store Arby's chain and spiff up the seedier outlets. Most of all, they want to refinance the onerous Lindner debt, which they say is callable. Unlike Posner, they argue they can land lower-cost bank debt. "Our greatest pleasure is in building a business," says Peltz. So it's once more, with feeling.


1985-86 Roar into financial big leagues by taking over National Can and American Can. Form Triangle, the nation's largest container company

1988 Sell Triangle to Pechiney, France's packaging giant, for $1.3 billion. But shareholders sue, claiming Peltz and May had earlier boosted equity stake, knowing French buyout was imminent. They deny this and later settle, paying $75 million, half of it coming from Pechiney

1989 Buy London-based property developer, Mountleigh Group, with $150 million from Triangle haul. Plan to sell off real estate and use as takeover vehicle

1991 Mountleigh goes into receivership after real estate market collapses

DECEMBER, 1992 Ready acquisition, planned for January, of debt-burdened DWG, parent of Royal Crown Cola and Arby's fast-food chain, from financier Victor Posner. Price: $72 million in cash


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