|Alan A. Ragland and Sharrie Williams|
Excerpted from a letter from
Alan A. Ragland. Ragland also wrote the preface for The Maybelline Story
The Maybelline Company was acquired by Plough, Inc. effective 2/28/68. Negotiations were currently going on with American Cyanamid, Revlon, and Kimberly Clark. Rags Ragland, The Marketing genius Tom Lyle hired in in 1933, had owned Plough stock and was the unique influence in recommending Plough as a suitor to the Maybelline Co. Ragland's reasoning was that he knew that Plough was in a solid enough position to buy the Maybelline and also due to the leverage factor, he knew that Plough would be a preferred candidate. Plough was in a far superior leveraged condition in that the company had much fewer shares outstanding.
During the 11th hour of negotiations, Ragland suggested to Tom Lyle's son Tom Jr., that Maybelline include Plough in the bidding: Tom's initial reaction was "Rags, they do not have the money"... Ragland's response was, "Yes, they do Tom. I know their circumstances, as I have been a stockholder for years and know they are cash heavy." Tom called Abe Plough and the next day
Plough was quickly and shrewdly chosen as the suitor: They offered a minimum of $100M and there was a period of grace, whereupon the stock would float, then a specific day, which was 2/28/68 that the Plough stock price would be "pegged" for the official exchange. On 2/28/68 the price of Plough had rallied so dramatically that the effectual buyout of the Maybelline company was now $132.3M! Yes, it was leverage that caused this! Demand plus fewer shares caused a stock breakout, which is a scenario seen on Wall Street each day.
In 1973 Schering, the 2nd largest pharmaceutical company in the world and Plough merged. Each of the stockholder's received 1.32 shares of Schering for every share of of Plough that they had owned.
Abe Plough and Lanny Smith flew up with their executive staff in their private jet from Memphis to talk to Maybelline in Chicago ... post haste!