A Terrible Argument By The American Express Board of Directors In 1976

In 1959, William Donaldson, Dan Lufkin, and Richard Jenrette started an investment bank that they named after themselves–Donaldson, Lufkin, and Jenrette, Inc. (usually called “DLJ”). It immediately went public, and employed thousands of people in its budding trading, underwriting, and research divisions. The odds seemed fair that it would emerge to occupy a dominant place on Wall Street, and it drew the attention of the American Express Board of Directors as a fast-growing firm worthy of acquiring.

The American Express Board of Directors couldn’t agree with the DLJ Board on the right price for an acquisition, so American Express just began acquiring shares of DLJ on the open market in 1972. If even a 70% premium wasn’t enough to convince the DLJ Board to sell, American Express was happy to flood the market with buy orders for 1,954,418 shares of DLJ stock. By the end of 1972, American Express had … Read the rest of this article!