Corporations: Hunt for the Best

Los Angeles Entrepreneur Norton Simon, a self-made millionaire, has few rivals among U.S. businessmen in the variety of his financial interests. They spread from his $400 million-a-year Hunt Foods & Industries through steel, salad oil, matches, paint and publishing. Yet Simon seldom stops in his search for new horizons, and last week he moved deftly in two widely different directions.

Wall Street learned that Simon has picked up 20% of the stock in Manhattan-based Canada Dry Corp., the biggest U.S. maker of ginger ale and soda water and the third largest maker of soft drinks (after Coca-Cola and Pepsi-Cola). At the same time, Simon bought 95,000 more shares of American Broadcasting-Paramount Theaters, raising his total to 205,000 of the company’s 4,600,000 widely owned shares. Most or all of these 205,000 shares are owned by the Simon-controlled McCall Corp., publisher of McCall’s, Redbook and other magazines.

Great Name. The $16 million purchase of Canada Dry stock followed Simon’s typical pattern for takeover of a company (TIME, Aug. 23). He bought the stock through his Hunt Foods, which, in addition to controlling McCall Corp., owns Wesson Oil, Ohio Match, Fuller Paint and a 7% share of Wheeling Steel. Canada Dry is just the kind of company that Simon thinks can benefit from his brand of management, which is devoted to a constant search for change and improvement. “Canada Dry has a great name and a strong brand position,” he says, “but earnings are modest.”

A small shareholder in Canada Dry since 1960, Simon became interested in getting Hunt into the company when he noticed that Canada Dry’s growth had failed to match Coke’s or Pepsi’s; on sales of $103 million in the last nine months of 1963, it earned only $3,600,000—less than half the percentage of profits from sales that its bigger rivals have become accustomed to. Last year, and early this year, Simon had Hunt Foods quietly buy up 8% of Canada Dry’s stock, then asked the company’s managers—who collectively own 2% of the shares—for a voice on the board. In an unusual step, he proposed that the directors nominate five university presidents and that he choose one of them as a Canada Dry director. They refused to accept Hunt’s plan.

Even though Hunt has greatly increased its investment lately, Canada Dry President Roy W. Moore Jr. still says flatly that he does not want Simon as a director or merger partner. Over at A.B.-Paramount, which this week will announce a 20% rise in first-quarter earnings, President Leonard Goldenson also readied for possible battle with Simon by increasing his own holdings in the company from 56,443 to 70,000 shares. Simon may try to win at least one directorship at next month’s annual meeting, says ominously that “we have friends with still more stock in the company” beyond his own holdings.

Grand Plan? Simon maintains that he is willing to fight if necessary for what he wants. What does he want? A notable collector of paintings and sculpture, he has a passion for artistic order. But he dismisses speculation that he hopes to build an integrated empire that would produce a big basketful of food and drink, pack it in his own tin cans, and advertise it through his own magazines and broadcasting network. He insists that he is simply using Hunt’s money to make sound investments, and wants to breathe some of his own fire into stagnant companies. Says he: “There is always a tendency by long-time in-management to play it safe, and thus too safe, and thus not safe at all.” Simon plays it shrewd. Over the years he has led Hunt’s to invest $46 million in various other companies, and those investments have grown to a worth of $76 million.