(FORTUNE Magazine) – AS ERIC GLEACHER, the top dealmaker at Morgan Stanley, beavered through the Christmas holidays helping Union Carbide fend off GAF, he made sure a case of champagne stood cooling in his office. That showed not only his meticulous planning, but also his supreme self-confidence. Hostile cash offers such as GAF's are hideously hard to defend. But GAF folded its hand shortly after New Year's, and Gleacher hauled the bubbly to the offices of Carbide's New York City lawyers for a 9 A.M. cork-popping celebration. Gleacher, 45, a recruit from Lehman Brothers who took over Morgan Stanley's mergers and acquisitions department a year ago, has set an immodest goal that could require truckloads of champagne. He wants to restore Morgan Stanley to its old position as Wall Street's No. 1 firm in the $200-billion-a-year takeover business. His ambition fits the firm's new aggressiveness. The blue- blood investment bank plans to sell shares to the public to raise $200 million. More capital will help Morgan Stanley finance leveraged buyouts, a lucrative part of the M&A business. It should strengthen other parts of the business too, such as big underwritings and trading blocks of securities for institutions. Dealmakers are the generals of the merger battles, devising strategies for chief executives and masterminding negotiations. Morgan Stanley had been Wall Street's biggest dealmaker in the 1970s, but by the time Gleacher got there it had slipped. Goldman Sachs, First Boston, and Lehman -- when Gleacher was running its M&A operation -- had surged ahead. Morgan's M&A department, directed by a committee, just wasn't nimble enough to adjust to the big changes sweeping through the business. In the not-so-old days, an investment banker could wait for a golf buddy or a squash partner to drop a deal in his lap. Now bankers themselves come up with most of the ideas for deals and persuade chief executives to go along. Says Perrin Long, a security analyst who covers financial institutions for Lipper Analytical, a New Jersey-based research firm, ''Morgan Stanley is one of the great old names in investment banking, but it was living on its reputation.'' By the time the ex-Marine from Lehman arrived in 1983, fees from takeover deals had dropped to $54.3 million, from $81.9 million in 1981. Last year, Gleacher's first full year in charge, fees rose to $202 million. Some of the increase is due to last year's takeover boom and some to deals the committee had in the works. But the perception on Wall Street is that Morgan under Gleacher is on the way back. In deals over $100 million in 1985, First Boston led the pack with 75, but Morgan tied Goldman Sachs for second place with 73 deals. First Boston, with a capitalization of $897 million, has been grabbing a lot of the leveraged buyout business. Going public will raise Morgan Stanley's capitalization from $500 million to about $700 million. Gleacher had a hot streak in 1985. Among other deals, he persuaded tiny Pantry Pride (fiscal 1985 sales: $345 million) to take over $2.4-billion-a- year Revlon, and he quarterbacked the $1.4-billion acquisition of Avco, an aerospace and electronics company, by Textron, a financial and electronics conglomerate. But the Carbide defense was his crowning touch. In a breathtakingly bold gambit, little-known GAF, a $724-million-a-year specialty chemicals and building materials company, offered $5.1 billion in cash for $9- billion-a-year Union Carbide (FORTUNE, February 3). GAF planned to sell off Carbide's highly profitable consumer prod- ucts division -- Eveready batteries, Prestone antifreeze -- at a premium. Gleacher's defense was ingenious. He beat GAF to the punch by persuading Carbide to sell the consumer division and pay out the proceeds as a handsome dividend to shareholders. Of medium height and powerfully built, Gleacher walks around Morgan Stanley with his hands on his hips and a no-nonsense look on his face. According to a rival, Gleacher is ''like a steel wall'' at the bargaining table. A marathon runner, he has the stamina to work 12 hours a day regularly and 20 hours at a stretch on deals, catnapping on his office couch. Like most dealmakers, he gets paid well for going without sleep. Morgan Stanley won't say how much Gleacher makes, nor will he, but top dealmakers at public investment banks can make upwards of $3 million a year. He will be further enriched by the stock offering, but once again he isn't giving out any numbers. Gleacher thinks dealmakers should never take no for an answer. Once he phoned Robert Cizik, chief executive of Cooper Industries, a Houston-based machine tool manufacturer, to suggest that Cooper buy McGraw Edison, a maker of electrical consumer products. Cizik wasn't interested. Gleacher persisted. ''Let me fly down and talk to you,'' he said. ''It's my nickel.'' Cizik agreed and the next day Gleacher flew to Houston, gave an hour-long presentation, and persuaded Cizik to make what turned out to be a $1.1-billion acquisition. Gleacher has a staff of 70, including a special team of ten assigned to do nothing but come up with takeover ideas. One team member arrives at 4:30 A.M. each day to sniff out hot tips from Morgan Stanley's overseas offices. Every morning Gleacher's staffers, including some not on the special team, line up outside his open office door, waiting to recite their ideas. Gleacher's desk is never cluttered, and he wants proposals in quick, short sentences. He thinks mountains of paper get in the way of clear thinking. Once an associate walked in and handed Gleacher a three-inch-thick book full of numbers and graphs on a possible deal. Gleacher took the book, dropped it in the wastebasket, and said, ''Come back when you know what you're talking about.'' Recently Gleacher shocked his peers by getting a 33-year-old promoted to principal after just 18 months at the firm. It normally takes about six years at Morgan Stanley to make principal, the first step before becoming a partner. But the man had brought in $33 million in fees in a single year. ''The young people learned,'' said Gleacher, ''if you really knock the cover off the ball, you can get promoted fast here.'' LIKE THE SELF-MADE millionaire in F. Scott Fitzgerald's The Great Gatsby, Eric Gleacher sprang from a Platonic conception of himself. He knew since childhood that he wanted to be rich. ''He set out to create his own identity,'' says a friend, ''to escape his humble past.'' Son of a construction engineer, Gleacher followed his father around the world on various jobs, including a highway project in South America. School held little interest for the lad. Until he reached high school, he had attended a different school every year. He channeled his energy into golf, winning an athletic scholarship to Northwestern University. Gleacher captained Northwestern's golf team while Jack Nicklaus led Big Ten rival Ohio State. After graduating in 1963 with a degree in history, Gleacher commanded a Marine rifle platoon for two years, then went on to earn an MBA at the University of Chicago. But it was golf that opened the doors to a world of wealth and power. During his first year at business school, Gleacher went to a local country club to shoot a round with an old friend who was assistant pro. As the two were about to tee off, a stranger walked up and asked to join them. He turned out to be Donald Perkins, then chairman of Jewel Cos., a Midwest supermarket chain. Gleacher must have dazzled Perkins as much with his glib line as with his booming shots. After the game Perkins handed Gleacher his card and said, ''If you ever want a job, let me know.'' Gleacher let him know, and spent the next summer at Jewel. Jewel had a job at corporate headquarters waiting for Gleacher but after business school he was bent on New York and investment banking. The Jewel connection came in handy anyway. With the help of two Jewel board members, Gleacher landed a $10,000-a-year job in the corporate finance department at Lehman Brothers. As he does now, Gleacher disdained the relentless numbers crunching that characterized corporate finance at the time. Instead he made broad recommendations for various kinds of financing based on strategic concepts. Clients ate it up and in 1973, just five years after joining Lehman, he made partner. In 1977 Gleacher started Lehman's mergers and acquisitions department. He was one of a small group of brash young men on Wall Street who pioneered the go- get-'em style of M&A. Within three years his department passed Morgan Stanley, then No. 1. But Lehman was not a happy shop, and Gleacher ran into the biggest setback of his career. Peter G. Peterson, the former Nixon Administration official who was then chairman of Lehman, decided that though Gleacher was a good dealmaker, he wasn't enough of a team player to manage a department full of high-strung talent. Peterson may have had a point. Lehman at the time was filled with political infighting. Partners, obsessed with their own deals, often avoided each other. Says a former partner, ''It was the kind of place where you could get stabbed in the back in the hallways.'' In any case, Peterson dumped Gleacher as head of the department, while keeping him on as a dealmaker. Gleacher soldiered on, but apparently with bitterness toward Peterson. A partner at another firm says Gleacher did not talk to Peterson for the next two years. He did keep talking to clients, with a vengeance. In 1983 he came out on top in one of Wall Street's most notorious takeover battles. Allied Chairman Edward L. Hennessy Jr. called in Gleacher to help him swoop in and buy up Bendix Corp., the aerospace firm then in a deadly fight with Martin Marietta, a Maryland-based electronics giant. At the end of that year it was Peterson who was out, having lost a power struggle with Lewis Glucksman, the brash head of Lehman's trading division. Gleacher had been a Glucksman ally for years, and the word went around that Gleacher would be back as head of M&A. Before that happened, though, Glucksman gave out bonuses that seemed to favor partners in the trading room at the expense of those in M&A. Gleacher thought the bonuses unfair and packed off for Morgan Stanley. Within months Lehman was acquired by American Express. Characteristically Gleacher lined up his new job while playing a round of golf with S. Parker Gilbert, chairman of Morgan Stanley. WHEN not dealmaking, Gleacher rarely does the New York night-life scene. He and second wife Annie, 36, prefer small dinner parties at home for friends in the closely knit M&A business. They have a 15-month-old boy, Jay. Gleacher's first marriage dissolved during the pressure-packed Lehman years. He and his first wife have three children, John, 19, Sarah, 17, and Jimmy, 15. A Columbia University MBA, Annie was working in the corporate finance department at Lehman when they met on a deal. Gleacher owns a spacious Fifth Avenue apartment overlooking Central Park. In the study hang eight oil paintings of one of his favorite golf courses, Maidstone on New York's Long Island. He also owns a 100-year-old house on the ocean in the Hamptons, a fashionable Long Island resort area. He calls the house his true home and says he wants to establish roots there to make up for all the traveling he did as a kid. Not incidentally, the Hamptons are inhabited by a huge number of chief executives in the summer, which makes the resort a pretty good hunting ground for a dealmaker on the prowl. Gleacher didn't take up running till he was 40; several months later he finished the 26-mile New York marathon in 3 1/2 hours. A couple of years earlier, he took up skiing and barreled down the steepest slopes he could find in Utah, twice dislocating his shoulder before he finally got the hang of it. Two summers ago Gleacher took up sailboarding, and by the end of the season was racing across the waves two miles offshore. Even with golf, his favorite sport, he doesn't let up. On a cold, gusty October day, he shot a 6 under par at Long Island's National golf course. His current handicap is 5. DEALMAKERS have been under attack lately. Some lawmakers and some chief executives have been clamoring for regulations that would curb takeovers, especially hostile ones. As you might expect, Gleacher believes the market, not the government, should decide whether a company gets taken over. He argues that dealmakers bring value to stockholders by driving up the share prices of takeover targets. He also believes that deals give companies the flexibility to unload their dogs and buy new, healthier businesses. And he is not particularly worried about the mountain of corporate debt that takeovers have produced. ''When you look at the debt of the world, the debt of the country, and the debt of the private sector,'' he says, ''you can't with a straight face tell me that a few speculative merger deals are going to tip the balance and create disaster.'' Gleacher thinks the takeover business will begin to slow down in 1986 anyway. After the stock market's big rise, he says, fewer companies are undervalued enough to attract raiders. Also, he thinks many of the obvious big deals have been done. True to his fighting spirit, though, Gleacher intends to increase Morgan's share of the business. Gleacher has money, a solid reputation, and some big deals to point to. So what keeps him going? Sometimes Gleacher wonders himself. ''It takes an enormous toll every time you cancel a vacation and have to tell your kids you can't go,'' he says. Apparently, though, Gleacher needs to compete as much as he needs to breathe. Says his wife, ''There's something in Eric that drives him to buy the next apartment, to ski down a higher hill, to do a bigger deal.'' The challenge to make Morgan Stanley Wall Street's No. 1 dealmaker ought to keep Gleacher going for some time to come.