New Qfc Investor Said To Be Savvy, Colorful -- Deal Will Give Zell Two Seats On Grocer's Board
Who is Sam Zell?
That's what Seattle investors are wondering now that Zell, through his Chicago-based Zell/Chilmark Fund, will become the largest single stockholder in Quality Food Centers Inc.
Zell and Stuart Sloan, QFC's chief executive officer and principal investor, got to know one another several years ago while serving on the board of Revco, an Ohio-based drugstore chain, said Marc Evanger, QFC's vice president and chief financial officer. The result was a $99 million investment by Zell in QFC stock, announced yesterday as part of a deal that will give Zell two seats on the grocery retailer's board and reduce the holdings of Sloan, now QFC's largest shareholder, to 11.8 percent.
The colorful Zell, who likes to play as well as concentrate on serious investment issues, annually leads a motorcycle-riding group of business tycoons, known as Zell's Angels, on two-week ventures through Europe or other continents. One of the riders is Sloan. Zell also conducts Halloween treasure hunts involving 200 friends from all over the country, careening around Chicago in limousines to chase clues.
Newspaper reports characterize Zell, 42, as an outspoken, blunt character with a reputation for being a savvy investor who emphasizes plain speaking and plain thinking and who sometimes makes predatory acquisitions.
He is chairman of several companies and has been nicknamed the "grave dancer" to reflect his delight in snapping up distressed properties, a tactic he began years ago as a real-estate investor.
His financial interests range from retail stores to radio stations.
Zell is among the wealthiest men in the country, with a reported net worth topping $880 million.
In 1976, he and three lawyers, including his brother-in-law, Roger Baskes, were indicted in a federal tax-shelter investigation over a $13 million Reno hotel deal. Baskes got a two-year prison term, but charges against Zell were dropped.
The Zell/Chilmark Fund's portfolio includes 89 percent of Sealy Corp., a Cleveland-based company described as the largest bedding manufacturer in the nation; 64 percent of Jacor Communications, a Cincinnati-based company that owns 13 radio stations; and a controlling interest in Broadway Stores, a Los Angeles-based company of 83 department stores across the Sunbelt.
Zell/Chilmark also owns 19.7 percent of Revco D.S., a Twinsburg, Ohio, chain of 1,213 drugstores in nine Eastern states. Revco emerged from Chapter 11 bankruptcy proceedings in 1992.
The fund's total investments exceed $1 billion.
Zell says he wants to concentrate on big deals rather than little ones, and he has told the Chicago Tribune newspaper that his goal is to dominate particular markets.
Another Tribune article described Zell as the antithesis of a corporate czar. "With a small man's combativeness and a liking for the pithy, profane phrase, he is sort of a Jewish street-kid Ross Perot," wrote Tribune reporter J. Linn Allen.
"The Perot strain comes out in his rugged individualism and slangy homilies, such as his philosophy on having his top people risk their money along with him in a business venture."
Information from Seattle Times business reporter Greg Heberlein is included in this report.