Word: kennecott
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Curtiss-Wright aims to carve up Kennecott...
Though corporate takeovers have flourished mightily in the past couple of years, nearly all have been buy-outs for stock or cash. The old-fashioned proxy fight seemed little more than a memory, but now a battle has broken out for control of Kennecott Copper Corp., the biggest U.S. copper producer. Curtiss-Wright, which owns about 10% of Kennecott stock, is appealing to Kennecott's stockholders to vote at the annual meeting on May 2 to dump the incumbent management and elect a new board...
Curtiss-Wright is openly declaring its intention to make Kennecott sell off Carborundum, an abrasives manufacturer that Kennecott acquired only three months ago for $571 million. Curtiss-Wright might also be tempted to liquidate some of Kennecott's other properties...
With assets of only $349 million, compared with Kennecott's $2.7 billion, Curtiss-Wright, a maker of aerospace parts and industrial equipment, does not have the financial resources to make an outright tender offer for Kennecott. That would cost some $750 million. Curtiss-Wright even had to borrow from its banks to buy its 10% of Kennecott stock...
Whether a merger of a copper company that is losing bushels of money with a highly diversified technology outfit can succeed will not be known for years. But Vice President J. Thomas Hill of First Boston Corp., the investment banking house that represented Kennecott in the deal, put the case for the merger this way: "Once it becomes public that a company is fighting off a takeover bid, that company inevitably has to be sold. The sharks begin to circle, but then the white knights like us move in and rescue the company." Now some Kennecott shareholders are doubtless looking...