Word: bendixes
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Finally, in a dramatic finale on Friday, the three combatants reached a truce. Allied would acquire Bendix for $1.9 billion, and Marietta would remain an independent company. If the deal goes through, the firms will have spent about $4 billion, much of it borrowed from banks, to buy and shuffle about one another's shares. Yet no one seems quite sure what good, if any, will result...
...boardroom saga began last month with a bid of some $1.5 billion by Bendix's ambitious chairman, William Agee, 44, to buy Martin Marietta and thereby acquire that firm's prestigious and profitable defense business. Stung by Agee's move, Marietta President Thomas Pownall, 60, launched a counteroffer of about $1.5 billion to buy Bendix instead. In addition, he persuaded United Technologies' chairman, Harry Gray, 62, who over the years had built his company into a $14 billion conglomerate with a string of successful takeover raids, to make a parallel bid for Bendix...
...unlike a military campaign, this tangled four-way struggle has produced profits for the financiers and spoils for the strategists, and inflicted casualties among innocent bystanders, including workers at the companies involved and shareholders around the country. Though Bendix had assembled a cash hoard of $575 million over the past two years by selling off some of its less profitable businesses, mainly forest products, Chairman William Agee still had to arrange credit lines for another $1 billion from a consortium of banks to make his takeover bid. Cash-poor Martin Marietta was forced to borrow $892.5 million so that...
Under Allied's takeover offer of $1.9 billion, some Bendix shareholders will emerge rich. Anyone who bought Bendix stock near its 1982 low of $45 per share could already have netted a windfall profit by selling out early to Martin Marietta at $75 per share. Before trading was halted last week, Bendix stock had fallen back to $57.50. Other shareholders, however, who wait to sell their stock to Allied, will be paid not in cash but in a combination of Allied stock and other securities, amounting to $85 per share. If the value of Allied stock now falls...
...clear winners in this war so far have been not the main combatants but their hired guns. Bendix employed two of the best-known investment banking firms, Salomon Brothers Inc. and First Boston, as well as three main law firms, along with three different public relations agencies. In all, the four companies are estimated to have spent $20 million on outside help of one sort or another. Was it money well spent? At one point in the thick of last week's battle, one investment banker observed of Bendix and Martin Marietta: "Both companies have wound up paying...