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No big rush to takeovers after market dive; how media covered it

Two weeks ago, a financial earthquake ripped through New York City's Wall Street; today, the aftershocks are being felt in Washington. Specifically, the rumblings can be heard in the public filings room at the Securities and Exchange Commission. That's where any investor (or company) who buys more than 5 percent of a company, or any investor who intends to take over a company, has to make his intentions known to the government and public.

Investors have 10 working days to do so, meaning that anyone who bought a bargain stock in that tumultuous week of Oct. 19 would have had to file this week. Theoretically, the activity in the SEC's documents room should have put to rest the debate over whether the 508-point plunge would scare buyers away from the market, or lure them to it.

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But it didn't: The verdict is mixed. ``We're seeing a few selected takeovers,'' says Robert Willard, head of mergers and acquisitions at Prudential-Bache Securities. ``People are watching rather than initiating offers.''

A look at SEC filings over the last two weeks supports Mr. Willard's assessment. A number of investors and raiders snapped up company bargains (see box); a number pulled in their claws.

The retrenchers did so because they had their money in the stock market (in ownership of companies); they saw their fortunes, and their ability to finance takeovers or buybacks, shrink with the market. For example, the Haft family dropped its bid for Dayton-Hudson; Irwin Jacobs dropped his plans to merge two of his companies, Minstar and Genmar Industries, for lack of financing; Carl Icahn chose not to take TWA private; and a major foreign investor, Jardine Strategic of Hong Kong, scrapped its offer to buy 20 percent of the brokerage house Bear, Stearns Companies.

Among those investors believed to have pulled out of the stock market before the plunge, a few have fulfilled market-watchers' expectations. Real estate magnate Donald Trump, who pulled out of the market in August with $200 million in profit, boosted his control of Resorts International to 93 percent. Asher B. Edelman filed that he had bought 11.5 percent of Foster Wheeler and said he intends to buy the reluctant company. Paul Bilzerian, an investor who has a history of unsuccessful bids, is trying again with a hostile offer for the Singer Company.

Others believed to have cash hoards, including Marvin Davis and Sir James Goldsmith, haven't made any significant moves yet. But they may strike soon, and when they do, they're likely to get competition from foreign investors, who see the bargain stocks as an even greater bargain because of the falling dollar. Nikko Securities in Japan, for example, announced Oct. 22 that it is committing $100 million to a merger-and-acquisition fund in the United States.

``People are getting comfortable with the levels'' and volatility of company stocks, says one investment banker who asked not to be identified. ``They're just getting their guns out, and we'll see a lot more hunting down the road.''

Another jury is in about the stock market: how the news media covered it.

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According to Media Monitor, a newsletter of the nonprofit Center for Media and Public Affairs, television was more pessimistic, personal, and political than newspapers.

While these findings are predictable, they aren't generally quantified. Researchers at the center compared 62 stories in the New York Times and Wall Street Journal with 36 stories on the three networks covering the market's decline from Oct. 6 through 19 (``Black Monday''). Here's what they found:

TV was more catastrophic, running 12 stories describing the decline in apocalyptic terms like ``meltdown'' and ``fiasco,'' versus seven in the two newspapers. ``In a story where the news was mostly bad, TV managed to put it in the worst light,'' says Robert Lichter, the center's co-director.

One out of every 8 sources quoted on TV predicted a recession, versus 1 in 50 in print. And a quarter of the television stories said that the 1987 plunge was as bad as the crash in 1929. Newspaper stories nearly always stressed that the economy was better and regulatory systems provided a safety net that didn't exist in 1929.

TV was more personal, focusing on investor panic as the main cause of the decline. ``TV showed people going batty on the floor of the exchange,'' Mr. Lichter says. ``Print dealt with abstract ideas such as rising interest rates and computerized trading'' as the major culprits in the decline.

TV was more political. Nearly a quarter of the time, TV blamed the Reagan administration for the market's troubles, versus 13 percent in the Times and the Journal. And government officials, rather than economists, were the stars of TV: Only one economist appeared on the television stories, versus 38 in print.

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