Honolulu Star-Bulletin from Honolulu, Hawaii • 31

Castle Cooke Fears takeover Attempt Star-Bulletin- The Thursday report Honolulu Thursday. March 8, 1 984 tee, would limit the freedom of a raider undertaking a "creeping acquisition," by requiring the investor to make a disclosure when his ownership passes the 10, 15, 20, 25 and 30 percent marks. WHENEVER HE makes such a disclosure, he would be unable for another year to vote any more stock in a board election than he did at the one before the disclosure. A second part sets tough limits on deals the target corporation can make with a raider, such as land or-shares swaps to buy off an undesired looter. Any such deal would have to be approved first by a vote of at least 75 percent of the outstanding shares plus votes of a majority of the shares that are free of the hands of the raider and his associates.

The final part says the acquiring person cannot sell off any of the corporation's assets worth $10 million or more without a yes vote from a majority of the directors ho don't represent him. The idea, a preamble to the bill says, is to "protect the corporation and its shareholders from the instability associated with fights for control of the corporation and possible decreases in the value of a company's stock or its assets following the The three parts, the bill says, approach three "of the most commonly used routes followed by takeover bidder to acquire the control of a corporation or to loot its assets." ANTI-TAKEOVER laws, attorneys told Sen. Steve Cobb's Consumer Protection and Commerce Committee, do the exact opposite of helping the little guy. They halt outside investment in companies and depress the price of stock. In fact, said attorney Robert Char, speaking for Weinberg himself is dead set against the measure because he also feels small shareholders will get hurt and more importantly, Hawaii's image will suffer with yet another example of a climate that doesn't attract investment.

Weinberg "will not commit himself to not taking over the company and Mr. Weinberg has the resources to do so at the drop of a hat," Char said. He said it is "one of the great ironies" that Weinberg is against making takeovers more difficult because it's probable that if the Legislature does so, it will depress stock prices "and he's going to buy the stock when it goes down and just take over the company." But Weinberg, Char said, thinks the bill is "stupid" because his investment advisers and all say that any state legislation that is seen as anti-investment is going to rule Hawaii out of the big investors' consideration. McCURDV AGREED with Sen. Duke Kawasaki that it's possible a takeover could be in the best interests of existing shareholders and said the first responsibility of management faced with a raid is "to get the maximum price they can from the raiders." Char said "will continue to fight very fervently against Mr.

Weinberg taking over the company but our battle is not worth the price of hurting all the shareholders." McCurdy said it "has been stated" that one of the reasons Castle Cooke's stock went down $1 a share yesterday was that "news of this bill leaked out." That is "absolutely incomprehensible," he said. CHAR SAID Weinberg's investment bankers told him that. "It suits Mr. Weinberg very well to say that, and you know it," McCurdy replied. Rick Tsujimura, assistant general counsel at Amfac, told the committee the bill is for the small stockholders who get "squeezed." to protect them against someone who will move in on a company and "loot it, raid it or somehow dispense it at less than fair market value." The law would make a raider "jump through certain hoops," he said and is designed to protect shareholders residing in Hawaii.

The state already has a takeover law which got on the books about 10 years ago from a similar genesis, with Castle Cooke supporting it which centers around disclosure requirements. It has not been exercised to prevent a takeover and there have been takeovers, friendly and unfriendly, since. The bill in question now, introduced in. the Senate and given a first hearing by Cobb's commit By Russ lynch Star-Bulletin Writer Castle Cooke Inc. made it very clear yesterday that the reason it would like to see a tighter law on corporate takeovers enacted in Hawaii is that it may be facing a takeover raid.

Texas investor Charles Hurwitz, who controls more than 9 percent of Castle Cooke stock, has said he will go for at least 15 percent. Sol P. McCurdy, Castle Cooke vice president and secretary, told a state Senate committee hearing that Castle Cooke has "a present shareholder (Hurwitz) who gives indications he has a takeover in mind" and said that's why there is some urgency to make it hard for anyone to raid Hawaii corporations. But McCurdy and attorney Hugh Shearer said Castle Cooke believes such protection is in the interests of minority shareholders who can be overridden by deals cut between directors and a raider moving in on a corporation. Amfac Inc.

took the same side, saying it believes a tighter takeover law would protect the little shareholders against raiders who get control of a company and loot it by selling off its assets. But Alexander Baldwin with Honolulu financier Harry Weinberg already owning more than more than 23 percent of and refusing to promise he won't go further, came out firmly opposed to the bill, bringing comments from senators about how seldom there are open differences among the Big Five. BUT MICHAEL Marks, vice president and general counsel at joined attorney Char in arguing the opposite view. Such laws are a "serious depressant" on stock prices in areas where they exist, Marks said. And he said management will not go to shareholders with any proposal to "hurt Mr.

Weinberg if it's going to hurt other shareholders." Marks, who shook his head from the sidelines at some of the other companies' talk of the "little guy," said the point is not what such a statute does legally, it's what it does to the business climate. A bill intended to discourage someone from buying a certain percent of a corporation "discourages someone from going out and buying any percent," and that flattens a stock and removes the opportunity for a small investor to get out at a profit, he said. That could be very bad for business and the people of Hawaii, however, he said. "Let's say Mr. Hurwitz gets control of the board of directors (of Castle Cooke) and he decides to close down Dole Pineapple.

Then? goes 1,500 jobs at least," McCurdy said. Shearer, also pressing for the bill on Castle Cooke's behalf, strongly disagreed with argument that legislation like this discourages investors, particularly the big institutions who make most of the buy decisions these days. Shearer said he has done corporate proxies and similar presentations for 30 years and has never heard "corporation law" raised as a negative by a potential investor. 4 Castle Cooke and Amfac both said their investment advisers tell them it's not true at all that a law like the one proposed would discourage investors. Kahala Hilton Builds a Lot of Loyalty in 20 Years These 45 employees, out of 500-plus ot the Kahala Hilton, have been with the hotel since it opened 20 years ago.

Pictured with the employees, center, is General Manager Louis J. Finamore and the Kahala Hilton's dolphins, 7 7j 4 i i 1 Jl' I By Russ lynch Star-Bulletin Writer Ever heard of the Waialae Hilton? Charles Pietsch Jr. has and remembers the name fondly. That's what Robert Caverly, a top Hilton Hotels executive 20. years ago, wanted to call what is now the Kahala Hilton Hotel.

Pietsch, who had secured the property and encouraged Hilton to come in, says Caverly, a keen golfer, thought the Waialae Country Club was pretty well known around the world and that ought to be reflected in the name of the new hotel. is if I V'-' il 'Jf, 4 11 YEARS A rV-r- 1 'I" I IT- w. cv- 1 HI i mi i i iMiir.il- i in i ii ii i -mir-wwr-w Pietsch said he squelched that idea with a four-word challenge to Caverly: "Spell Waialae for me!" The executive couldn't and Pietsch's choice, Kahala Hilton, was what stuck. Pietsch still has on his desk the golden scissors he was given to cut the maile lei to open the hotel at its grand opening Jan. 22, 1964.

(He didn't. The Honolulu-born Pietsch knows you're supposed to untie maile leis not cut them.) There are many who, like Pietsch. have fond memories of the hotel as it quietly marks its 20th anniversary this year. IT HAS BEEN an unusual part of Hawaii and has influenced many. (A scene of it in late 1960s Elvis Presley movie even clinched this writer's decision to come to Hawaii.) There have been some ownership changes, but Hilton International Hotels still manages it as it has throughout, and the hotel doesn't seem to have any trouble keeping the loyalty of its longtime guests.

"One family comes here three times a year with two children and a nanny from Rome," said Louis J. Finamore, new to the hotel but no stranger to Hilton International. He joined the hotel company back in 1957 when it was still part of Hilton Hotels Corp. He came to the Kahala Hilton last June 1 after a three-year stint as general manager of The Drake Hotel in Chicago. And he said in an interview that the Kahala Hilton is almost unique in the world in the amount of repeat business it gets 65 percent of the guests are returnees.

The guests aren't the only things consistent. The Kahala Hil- opened helping workers finish it and one of his favorite jobs was stocking the hotel's ponds with fish, turtles and other tropical ocean creatures. When Pietsch got back to Honolulu after World War II he got into real estate. He recalls how much he wanted to develop the property at Kahala into a hotel and how he got Conrad Hilton interested. There was "a year of struggle" to get the right zoning and land approvals "and Hilton wouldn't enter into a formal agreement until all that was cleared." Pietsch said.

The hotel, then with 302 rooms and built at a cost of $11 million tiny by today's standards -was opened as the only hotel In the United States operated by Hilton International. That company was spun off from Hilton Hotels Corp. and In March 198. Hilton International took on full ownership of the Kahala Hilton. Hilton International became part of Trans World Airways' group and still is.

Massachusetts Mutual Life bought the property in late ly73 and in early 1974. the Australian connected MEPC Hawaii Ltd. bought it. The present owner, since May 1978. is WKH Corp.

The hotel now has 370 "saleable units." Finamore says you can't count by rooms because there are manv suites of several rooms. likes that the hotel can find out about are on record. The hotel maintains a computer "guest history" that not only alerts all the staff about the particular requirements of anyone coming in but is helping Finamore send out letters gently reminding some of the regulars that they haven't made their usual bookings yet. Pietsch remembers room rates averaging $32.50 when the hotel opened. Finamore says they range from a low of $135 to $1,000 for a suite now, but there is an unusually high demand for the suites.

THAT $1,000 is "pretty cheap." he said. "1 had one in Chicago tion near enough to Waikiki-but far enough from it and surrounded by open space and ocean the hotel has developed some characteristics over the 20 years that keep it doing good business. One that Finamore said he particularly likes is the "family" relationship between longtime staffers and longtime regular visitors. Guest questionnaires over the years have regularly been returned saying "don't change anything," he said. Pietsch, who has thrived in the development business, still drops by and looks over the hotel that was one of his first loves.

HE WAS OFTEN around the place in the days before it that I charged $2,000 for." but it was one of those things that are mostly used as extras for visiting dignitaries or business people ith a special to the hotel. It wasn't often used as a regular room by persons paying the full price. The Kahala Hilton is "one of the few hotels I ever managed where people actually demand our suites and are willing to pay the price," Finamore said. Like all the other hotels in Hawaii, the Kahala Hilton has seen business slip a bjt in recent years and it's "not quite as pink and rosy as it was a few years ago," Finamore said. But quite aside from the loca ton has 45 employees, out of a total of 500, who were at the hotel hen it opened.

HENRY MIYAMOTO. 57. left a farm in Waimanalo with no hotel experience and managed to get a job at the Kahala Hilton in December 1963. He's still there and after graduating to bellman 16 years ago and staying with it since, says he wouldn't want any other job in any other place. "This is the first hotel I ever worked for and I'll be here until I retire." he said.

American presidents, foreign royalty, stars of stage and screen, business tycoons all have stayed there, and just like any other customer, any of their likes and dis Hawaiian Trust Realigns to Counter Competition Hawaiian Trust is restructuring so a client will be able to come to one planner, instead of several, to have his trust and planning needs taken care of. Douglas T. Stevenson, vice president of marketing for Hawaiian Trust, said it used to be that a client came to a trust company for administration of the estate of someone who had died. THEN, THE ROLE expanded to include administering the affairs of a person upon his retirement. Now.

the company is also looking for clients in the capital-accumulation age somewhere between 35 and 50 and actively marketing its services to them, a move that is taking trust companies away from their traditional, stodey image. "We're no longer really a trust company, but a financial services company," Aull said, a redefinition that has "caused us to come up with a variety of services." Among those services is the "sweep account" through which the "loose cash" in a client's account is swept into various money market funds at the end of each day. and drafts, which give a client access to the balance in his account by writing drafts, which are cleared through the commercial banking system, like checks. Also. Hawaiian Trust is in the process of developing a service through which a client can gain direct access to his trust and aeency balances through a Visa debit card.

By developing these new services and staying abreast of the changing financial environment. Hawaiian Trust has been able to continue for the past 10 years an unbroken string of increased revenues and income. LAST YEAR, the company reported net income of $1.44 million, or $7.06 a share, on opt rating revenues of $11.29 mi" That is an improvement over 1 :.2 net income of $1.21 million, or $5.92 a share, on operating revenues of $10.31 million. Aull said he believes that another change likely to mutt from the deregulation of the financial services industry is the removal of the barrier that keeps banks from moving across suue boundaries. While he said he prefers to see Hawaiian Trust remain indepeti-Tara to Page C-8, CoL 1 more to the Mainland for the administration of their pension and profit sharing plans.

Such moves diminish the growth of Hawaiian Trust's corporate businesses, so hile it continues to serve corporate clients, it now sees its growth opportunities in the personal side of the trust business. "We still do the old things, too. but our growth is in new (types of business," Aull said. THE COMPANY'S realignment, approved Tuesday by the Hawaiian Trust board of directors, streamlines and simplifies operations, making it easier. Aull said, to coordinate client relationships and react more quickly and effectively to changing conditions and changing client needs.

The restructuring includes the promotion of four vice presidents to the new rank of senior vice president and puts each in charee of a division. William J. Barton heads the investment division, Walter Freitas runs the operations division, Richard E. Hagstrom manages the real estate division and Thomas J. Macdonald is in charge of the trust division.

"We haven't added any new By Ron Daines Star-Bulletin Business Editor Hawaiian Trust the state's largest trust firm, is realigning its operations, a move it says is in response to the growing competition in the business of financial planning. "There's a new environment as far as the trust business is concerned," says William E. Aull, president and chief executive officer of Hawaiian Trust. Aull. in an interview yesterday, said the new environment, largely the result of deregulation of the financial industry, includes the entry of huge companies like Sears, Roebuck and American Express the financial-planning arena as well as the proliferation of independent financial planners.

In concert with this new competition, Aull said, the changes in the makeup of Hawaii's business community prompted Hawaiian Trust to realign its structure. For example, he said, many of Hawaii's large companies are moving their corporate headquarters to the Mainland or are being taken over by other companies. Consequently, he said, they look fas "We still do the old things, too, but our growth is in new business." William E. Aull, president, Hawaiian Trust. Star-Bulletin Photo by John Titchen.

added responsibility of chief executive olfioer in 19S2. said that with companies like Sears moving toward the goal of being "one-stop linancial centers." areas, but the lines are a little more clearly draun," Aull said. Aull, who joined Hawaiian Trust in 193. was elevated to president in 1980 and given the.