Word: curtisses
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Takeover artists are often suspected of wanting to tap the till of the target company, but hardly any ever admit it-let alone boast about it. An exception is T. Roland Berner, chairman of Curtiss-Wright, who is campaigning to unseat directors of Kennecott Copper and install his own board in a shareholder election May 2. In the most unusual proxy statement in recent years, Berner last week vowed that if Curtiss-Wright gets control, it will distribute some $660 million of Kennecott's assets to stockholders-who prominently include Curtiss-Wright. It owns 3.3 million Kennecott shares...
...Curtiss-Wright told Kennecott's shareholders that it would raise most of the money by having Kennecott sell Carborundum, for $567 million or a bit less. Berner would make up the rest by dipping into Kennecott's $140 million in cash and securities, and perhaps by having Kennecott borrow against a $400 million promissory note...
Money in hand, Curtiss-Wright might have Kennecott make a cash distribution of some $20 a share to its own stockholders. In that case, Curtiss-Wright would get back $66 million on Kennecott stock that it paid around $77 million to buy. Berner's preferred alternative is to have Kennecott buy back half its 33.1 million outstanding shares for about $40 each-including half the stock that Curtiss-Wright bought for an average $23.42 a share. Other Kennecott stockholders might find Berner's plans attractive. Kennecott management is sure to find them a tempting target for that...
Berner's strategy is similar to his attack on Curtiss-Wright in 1948. Management had been piling up cash; Berner, then a Wall Street lawyer, badgered it to distribute the hoard in a special dividend to shareholders. Curtiss-Wright refused, so Berner launched a proxy fight, forced the company to dispense dividends liberally and eventually had himself elected a director and chief executive...
...recent years Curtiss-Wright has not been a distinguished performer. Profits dropped from $19 million in 1976 to $16.3 million last year, while sales fell from $337 million to $310 million. Berner, a silver-thatched figure, has become something of a recluse. That is a stance he must now abandon; a proxy fight is a campaign for votes, and the attacker must be as much a politician as a businessman...