He's Hungry to Buy an Airline

By Janice Castro

Other than luck, what an oilman needs most is persistence. Marvin Davis has plenty of both. The bulky son of a dress manufacturer from Newark, Davis made his first billion dollars in less than 20 years as a Denver-based wildcatter with a salesman's knack for raising capital and a blessed instinct for drilling gushers. Now, amid the takeover frenzy gripping the airline industry, Davis has set his cap for a giant carrier.

Only two months after Northwest Airlines rebuffed his $2.6 billion bid, Davis has bounced back with an even grander scheme. Last week he offered to pay $5.4 billion, or $240 a share, for UAL, the parent company of United Airlines, the second largest U.S. carrier. UAL's board said it would consider the offer, and sent emissaries to meet with Davis' advisers. Meanwhile, UAL shares rocketed from 164 1/2 to 257 in just four days. Wall Streeters believe that the price could top $300 if other buyers bid.

Either way, Davis is likely to score big, which is his habit. He used his oil profits in 1981 to buy 20th Century Fox, then sold it to Rupert Murdoch four years later for an estimated profit of $325 million. Davis picked up another $50 million by buying the Beverly Hills Hotel from the family of insider trader Ivan Boesky in 1986, then turning around and selling it to the Sultan of Brunei. Even Davis' "dry hole" takeover attempts often pay off. While Los Angeles investor Alfred Checchi won Northwest with a $4 billion bid, for example, Davis pocketed an estimated $30 million by selling his shares after the price ran up.

Colleagues have described Davis, 63, as a "killer" in business, an intimidating dealmaker whose 6-ft. 4-in. height and 280-lb. heft amplify his forceful nature. At the same time, he is a gregarious socialite who counts among his close friends Gregory Peck, Don Rickles, Henry Kissinger and former President Gerald Ford. Like many pals, Ford has invested in Davis' oil deals over the years. Says Ford: "You look at Marvin, and he looks like a tough, mean guy -- and he is a tough businessman. But on a personal side, he's a warm person, a nice guy to be with."

Davis has contributed millions of dollars to medical research. From 1978 to 1985, he and his wife Barbara were the hosts of Denver's annual Carousel Ball, a glittering, star-studded bash devoted to fund raising for diabetes research. (One of Davis' three daughters suffers from the disease.) Since moving to Beverly Hills in 1985, Davis has supported a string of California medical- research centers.

Davis' sons John, 35, and Gregg, 26, are his business partners. John says his father taught him to do his homework, then "trust your gut." Sometimes the big man means it literally. When Davis spotted a good investment in the Carnegie Deli, the venerable Manhattan restaurant featured in Woody Allen's Broadway Danny Rose, the financier struck a deal to open a Hollywood branch. The glitzy grand-opening party last month featured a 3-ft. plastic matzo ball being lowered into a vat of simulated chicken soup. Best of all, Davis can now order his favorite pastrami sandwiches at poolside.

If another bid for United emerges, stock speculators wonder, will Davis raise the ante or once again take his stock profits and move on (he is believed to hold a 3.5% stake in the company)? Back at Horace Mann High School in the Bronx, Davis' classmates said the pugnacious youth could -- and would -- argue any side of an issue. Even now he may be mulling his next daring move over a nice hot pastrami sandwich in Beverly Hills.

With reporting by Dan Cray/Los Angeles and Gavin Scott/Chicago