In the rarefied air of the corporate takeover, where the zeros seem to run on for miles before reaching a decimal point, the gut issue really isn't money. Consider Carl Icahn, 49. In his battle to buy Trans World Airlines, the New York investor has so far shelled out about $200 million in cash for nearly one-third of the company's outstanding stock. To get the rest—which Wall Street analysts suggest might not be worth the price—Icahn and his backers have pledged a much bigger bundle, about $500 million, also in cash. Those figures might give your average multimillionaire a case of the shakes, but it's not what made Icahn sit bolt upright in his poolside lounger at home in suburban Westchester County, N.Y. and shout into his phone at an aide in Manhattan.

"This is outrageous!" Icahn roared. "They keep calling me a liar!" Icahn had just been told that, despite his persistent denials, TWA was sticking by its charge that he wanted to dismantle the carrier, not run it. Slamming down the phone, Icahn indignantly barked at a visitor, "I've never lied in my life! On Wall Street, all you have is your word. If you lie once, you're through."

Halfway across the country, in Amarillo, Texas, T. Boone Pickens, 57, was looking at some pretty scary numbers himself. For the first time, the best-known cowboy in the takeover corral had come away empty-handed after trying to lasso a bigger company. The feisty chairman of little Mesa Petroleum (1984 sales: $413 million) had been forced to abandon his three-month pursuit of Unocal (1984 sales: $11.4 billion), the nation's 12th largest oil company, which is better known by its 76 logo. The Supreme Court of Delaware (where Unocal is registered) backed Unocal's bold anti-takeover maneuver, which called for buying up everybody's stock except his. Pickens pooh-poohs some predictions that he and his partners could lose up to $100 million, claiming he will at least break even. Though he calls the court decision "the biggest surprise I've had in 35 years of business," he scornfully dismisses it with one of his customary sports similes: "That call was like Doug Flutie throwing a Hail Mary pass and making a touchdown. They [Unocal] were extremely lucky."

A day after Pickens said that, Flutie, who knows the meaning of millions himself, broke his collarbone and was out for the season. In football and finance, as the big corporate raiders have been harshly reminded recently, you never can tell what's going to happen next. And in both fields, the real stars are motivated mainly by pride.

To most people, the problems and rewards of trying to take over a multi-billion dollar corporation are as remote and unintelligible as the inner workings of next year's new missile. Nonetheless, people like Carl Icahn and T. Boone Pickens in the last few years have rearranged the American corporate landscape so dramatically that their impact has been compared to that of John D. Rockefeller and Jay Gould. In simple terms, they have wrested control of companies from management: Chief executives have discovered, to their horror, that "their" companies can be captured by buccaneers wielding odd new weapons. An important weapon is the "junk bond"—a low-rated security that gives a high return because it is relatively risky; enough investors are willing to promise to buy such junk bonds to supply raiders like Icahn and Pickens with all the money they need. The raiders say they are really befriending the stockholder—meaning the common man—by loosening the grip of overly cautious executives who are behind the times. The executives retort that the raiders are simply greedy and wouldn't know how to run a big company if one, heaven forbid, fell in their laps. Whatever the merits of these arguments, these battles have, at least temporarily, put the matter of who controls some of America's biggest companies into question—and chief executive officers don't like that result one little bit.

Take, for example, Unocal Chairman Fred Hartley, 68, another man for whom the gut issue is control, not money. Playing against Pickens, Hartley could have sought a "white knight," a friendly company to buy up Unocal at a higher price per share than Pickens was offering. That's what Gulf did last year, selling out to Chevron in the biggest merger in business history. As a result, Pickens and his partners backed off, but pocketed an enormous $760 million profit on Gulf shares they sold to Chevron. Unocal's Hartley would have none of that white knight stuff. Pickens, holding 13.6 percent of the company, had offered stockholders $54 a share. Unocal countered with an offer to buy back its stock at $72 a share, excluding Pickens from the deal. The subsequent court victory last month stuck Unocal with a long-term debt of $5.4 billion, up from $1.3 billion prior to the fight. "We're still sailing, but we're under a bit of an anchor," Hartley concedes. But his primary goal was to save Unocal—which he joined in 1939 as an engineer—and foil "financial barbarism, terrorism or gangsterism, call it what you want." It is fair to say that Hartley doesn't cotton to people like Pickens.

TWA takes a similar view of Icahn. Rather than submit to him, President C.E. Meyer Jr. filed suit against Icahn and asked the federal Department of Transportation to investigate whether he was "fit" to run an airline. Then Meyer put TWA up for sale on the open market. The airline contends it will send Icahn's $18-a-share bid to the stockholders if no better offer comes along in 60 days. "Insulted by this self-serving ruse in response to my friendly offer," Icahn may now move to dissolve the TWA board and force a vote. "You gentlemen want a fight?" he crows. "You got it."

Icahn has always warmed to a challenge. Growing up in a homely section of Queens, N.Y., the son of a lawyer who was also a synagogue cantor and a schoolteacher, Icahn says that "from early youth I had the urge to achieve perfection. My father taught me to find out what I wanted to do and then go for it." He was, he says, the first student from Far Rockaway High School to be accepted at Princeton, where he majored in philosophy. Empiricism—the use of observation and experience, not theory—especially appealed to him because "it recognizes as knowledge that which we can arrive at through the senses."

After graduation, Icahn's senses told him to head for Wall Street, but his mother wanted her son to be a doctor. He tried to oblige, but quit medical school three times. Finally Icahn's uncle got him a job as an apprentice broker at Dreyfus & Co.

In the bull market of 1961, Icahn made $50,000—and then lost it in a week. "I have never played the market since," he says. Instead, he got into the new field of options trading, which eventually led him into the takeover game. Since founding Icahn & Co. in 1968, he has made at least $100 million from more than a dozen deals.

Pickens, too, showed an early enterprising streak. Growing up in Holdenville, Okla., he was the baron of a large newspaper route. Though eager for more streets, Pickens was so relentlessly efficient ("100 papers in 45 minutes, using both hands") that he agreed to take on additional routes only if they were adjacent to his. One of the streets he acquired, he remembers, was named "Gulf."

Pickens had a geography teacher—she happened to be his aunt—who refused to give him an A no matter how well he did. "She said I wasn't working up to my potential," Pickens recalls. That criticism haunted him through high school, a stint as a pre-veterinary student and his sophomore year at Oklahoma State—until his father, a lawyer who worked as a land negotiator for Phillips Petroleum, told him to "get into petroleum engineering or geology or get out of school." After graduation and four years at Phillips (which he thought was ineptly managed), Pickens Jr. struck out on his own. He did well-sites work—drilling and buying wells—wheeling from deal to deal in the '55 Ford station wagon that was his principal asset until two backers came up with $2,500 in cash and $100,000 in credit, which allowed him to start the series of investor drilling groups that became Mesa.

Pickens and his second wife, Beatrice, 53 (he has four children by a first marriage, which ended in 1971), divide their time between a place in Palm Springs, Calif., a 14,000-acre ranch and a one-story house in Amarillo, and a 6,500-acre cattle ranch in Oklahoma, not to mention the New York hotels where Pickens sets up his command posts. When Bea goes along on business, she lends an informed and keenly interested ear. Says Pickens, "Bea's the kind of person where you can blow up a ball, throw it in the air and tell her what game it is, and she starts playing." Adds Bea of their 13-year marriage, "I live under a lucky star."

In their 20-room, French-style, Westchester chateau, Carl and Liba Icahn live casually and privately. To avoid peeping neighbors, they bought the two adjacent clapboard houses. They have been married since 1979, the first for each. A dedicated suburbanite, Icahn loves to bash tennis balls on his sunken court and swim laps in his backyard pool. The problem is that he rarely bashes or swims. "He always promises that sometime he'll have as much time for me as I want," says Liba, 36. "At any rate, I want him to be happy and to feel fulfilled. Maybe he'll really slow down someday."

It won't be soon. If Icahn actually succeeds in taking over TWA, says one industry analyst, he'll have to "brace up for one hell of a honeymoon." Just one problem facing the troubled airline: negotiations with mechanics' and flight attendants' unions, from whom TWA wants wage concessions.

Some observers say the tide may be turning against takeover artists like Icahn and Pickens. The controversial Delaware court ruling sets a daunting precedent. Companies are scrambling to find other new anti-takeover defenses, and bills have been introduced in Congress to curtail hostile raids.

But the giants of raiding may come up with new trick plays of their own. "There's no doubt the game has changed," Pickens admits. "We're resting now, working 12 hours a day instead of 18. But we're thinking about a lot of things. If you have a deal that makes sense, there's no trick to getting the money together. It may not be mergers and acquisitions. It may be something else." That alone ought to keep the corporate counterplotters brainstorming a while longer.

  • Contributors:
  • Lianne Hart,
  • Ron Labrecque,
  • Raji Samghabadi.