To win a proxy fight, PacifiCorp must convince the institutions that the merger will achieve their goals, which differ from the concerns of a Scottsdale retiree looking to finance his golden years with dividends. The institutional investors are interested primarily in growth potential--not the amount of dividends a stock yields, but how much its value is likely to appreciate over five or ten years.

Roughly one third of PinWest stock is in the hands of mom-and-pop stockholders, and in a tender offer they must be convinced that only PacifiCorp can restore healthy dividends. The remainder of the stock is in the hands of arbitragers, whose sole interest is in turning a quick profit on short-term stock trades. All they want to know is when the stock has maxed out its potential for speculative profit, at which point they'll happily unload it onto whoever is buying.

Corporate strategist Steinberg won't say what PacifiCorp will do, except to say the company won't fold its tent and go home because it's convinced it will eventually win. "It's obvious to most of the people I deal with that this is fundamentally a good idea," Steinberg says with a patient smile.

end part 2 of 2

Steinberg's job is to convince people they aren't looking at a corporate raider, they're looking at a white knight.

"Arizonans Can Expect More From PacifiCorp," the headline announces in type usually reserved for the outbreak of world wars.

"Is it nasty? You bet, but that's not to say it's unfair."

PacifiCorp was advised to hire Alfredo Gutierrez to prevent PinWest from hiring him.

Richard Snell of PinWest: "We will not descend to the depths they have, but we're gonna do what's necessary to dispel some of the misinformation."

Snell came off as "the typical corporate fat cat," says one Rotarian in the audience.