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A colourful term for somewhat nefarious dealings which were particulariy common in the decades following the Second World War and which led to the acquisition of fortunes by the less scrupulous operators. The opportunities arose from the escalation of property values, coupled with the innate inaccuracies of historical cost accounting. The shrewd operator would look for a company possessing large reserves hidden in undervalued properties which were not being run to the cash advantage of the shareholders. He would gradually, or by a quick take-over, acquire a controlling interest in the company. The properties would then be revalued to create a substantial reserve, which would feature in the annual accounts. The assets of the company, particularly the more valuable properties, would then be sold for cash, which would be distributed – the operator taking the bulk consistent with his majority shareholding. If possible. by use of some of the cash generated and assuming many assets were sold and leased back, he would put the company into a profit-making position, declare dividends to bump up the price of the shares and then make a second killing by unloading his holdings or shares on to a more eager market – a market that by this time placed a higher value on them than when he bought them.
Reference: The Penguin Business Dictionary, 3rd edt.
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