| Associated Press Fri 07-MAR-1986 08:44 Electrolux-White
White Consolidated Battles Takeover Try
CLEVELAND (AP) - White Consolidated Industries Inc. directors
have rejected a takeover offer made by Sweden's AB Electrolux,
saying $45 a share for each of 15.8 million shares is insufficient.
The directors' action Thursday came as White Consolidated's
lawyers filed a second lawsuit in U.S. District Court in Cleveland,
alleging that the takeover attempt is illegal on antitrust grounds.
That lawsuit names as defendant not only Electrolux, Europe's
largest appliance manufacturer, but also Tappan Co., of Mansfield,
Ohio.
Tappan, acquired in 1979 by Electrolux, competes against White
Consolidated in electric and gas ranges and other appliances,
according to the suit.
The Cleveland company, with corporate roots in the city dating
to 1866, is the nation's third-largest appliance goods
manufacturer, behind General Electric Co. and Whirlpool Corp.
The Electrolux offer amounts to $711 million, but the total
price would rise to $725 million if options outstanding for White
Consolidated were to be exercised, an Electrolux spokesman has said.
White Consolidated directors, saying the offer was inadequate
and not in the best interests of the company's shareholders, told
management and financial advisers to explore alternatives.
Meanwhile, lawyers for White Consolidated and Electrolux clashed
verbally in federal court in Cleveland before Chief Judge Frank J.
Battisti on White's first lawsuit in the matter. In that case, the
company requested a temporary restraining order to block the deal.
Battisti is expected to rule on the request soon.
Thomas S. Kilbane, a Cleveland lawyer for White Consolidated,
said Electrolux was "trying to gobble up White Consolidated" in
violation of U.S. securities laws.
Electrolux already has said it would sell off White
Consolidated's room air conditioning operations.
White Consolidated's stock closed Thursday at $48, down 12 1/2
cents on 425,300 shares traded. The stock, which was selling for
$38.50 Friday, climbed to $48.75 on Monday in hectic trading of
about 1.6 million shares after the offer was announced.
George Morris, an analyst in Cleveland with the Prescott, Ball &
Turben investment firm, said White Consolidated was "looking for a
way to keep control of the situation." He said the company was
probably scrambling to get a higher price from elsewhere.
|
| Associated Press Mon 10-MAR-1986 23:15 Electrolux-White
By DENNIS CONRAD
Associated Press Writer
CLEVELAND (AP) - The board of directors for White Consolidated
Industries Inc. on Monday accepted the second takeover offer in a
week by Sweden's AB Electrolux, which had raised its bid to $742
million from $711 million.
A statement released by White said the board would unanimously
recommend to its shareholders that they accept the $47-a-share
offer by Electrolux, Europe's leading appliance maker, for all of
White's common stock.
There are 15.8 million shares outstanding.
"It is also anticipated that a definitive merger agreement will
be entered into as promptly as possible," the statement said.
Shareholders who do not tender their stock as a result of the
offer will nevertheless receive $47 in cash in connection with the
merger, the statement said. In addition, White Consolidated
authorized the grant to Electrolux of an option to acquire from the
company up to 18 1/2 percent of the outstanding common shares at $47 a
share.
Under the agreement, White will become a wholly owned subsidiary
of AB Electrolux, and White chief executive officer Ward Smith will
be chairman. Company headquarters will remain in Cleveland.
Neither Ronald G. Fountain, the White Consolidated treasurer and
vice president for finance, nor Smith could be immediately reached
for comment.
After the first offer of $45 a share, White's common stock
traded above $48 a share, reflecting investor speculation that a
higher bid from Electrolux or a third party might be forthcoming.
But the later Electrolux-White announcement appeared to dampen
expectations for an extended bidding war, and White's stock fell
$1.50 a share to close at $46.87 1/2 Monday in consolidated New York
Stock Exchange trading.
Electrolux products include Tappan ranges, based in Mansfield,
Ohio, and Eureka vacuum cleaners. White Consolidated is the third
largest U.S. appliance manufacturer. Its brands include Frigidaire
and Kelvinator.
After Electrolux launched its initial offer last week, White
asked a U.S. District Judge Frank Battisti in Cleveland for a
temporary restraining order to block the bid. Battisti refused but
set a hearing for March 17 for a preliminary injunction.
White subsequently filed a second lawsuit charging that the
proposed merger would violate U.S. antitrust laws.
Meanwhile, Electrolux said it had agreed with Emerson Quiet Cool
Corp., a maker of air conditioners and humidifiers, that voids a
1983 agreement under which Electrolux had promised not to compete
with Emerson prior to Sept. 30, 1988.
White Consolidated makes air conditioners and humidifiers, and
Electrolux had planned to divest that business after it bought
White in order to honor its previous agreement with Emerson.
But Electrolux said that because of its new agreement with
Emerson, the proposed divestiture "will no longer be necessary"
if Electrolux succeeds in acquiring White.
White Consolidated had guaranteed the employment of its top
seven officials for the next three years following any change in
control of the company, or an equivalent amount of pay if they are
forced out.
Charles Ryan, an analyst with Merrill Lynch, said the latest
Electrolux offer was in line with his firm's analysis that the
takeover would occur at around $50 per share.
E. Magnus Oppenheimer, president of E. Magnus Oppenheimer & Co.,
said White Consolidated has wisely been allocating hundreds of
millions of dollars for improving its plants, and he said the
merger would give it access to more cash.
|