American Natural Resources Co. directors are considering a "white knight" merger with another company as one way to fight Coastal Corp.'s $2.2-billion attempt to take over the Detroit-based energy company, an official said Friday.
Documents filed Thursday with the Securities and Exchange Commission in Washington indicated that ANR is considering the sale or transfer of ANR assets, buying back ANR stock, issuing new stock or making a major change in ANR's capitalization or dividend policy.
"There can be no assurance that any of the forgoing will result in any transaction being recommended to the board," the SEC filing said.
A "white knight," in corporate takeover parlance, is a company that rescues a company threatened with hostile acquisition by arranging a friendly merger with another company.
"It's one among other options," said Jim Bailey, ANR spokesman said, adding that the company was not giving special weight to the "white knight" option.
Houston-based Coastal has offered $60 a share for ANR common stock in an attempt to gain control of the company.
On the New York Stock Exchange on Friday, ANR closed at $62.50.
ANR officials this week held discussions in Detroit with Kenneth Lay, chairman of Houston Natural Gas Co., but James V. Walzel, Houston Natural president, on Thursday described the talks as cursory.
"ANR is talking with a lot of people, and I don't expect anything major to develop involving us. If anything should come of the talks, it would be more along the lines of a joint business participation (in a project)," Walzel said.
ANR directors will review the Coastal offer Tuesday, the company said.
"After receiving the advice of its financial and legal advisers, the board expects to make a recommendation to stockholders of the company with respect to the offer," the company said in its SEC filing.
In an "open letter to shareholders, employees, customers and friends of American Natural Resources," published Friday in Detroit as full-page newspaper advertisements, Coastal reiterated its previous statements that it would not liquidate or dismember ANR should the takeover succeed.
"Our plan clearly shows that we can purchase all the ANR stock and operate the combined companies with enough cash flow to service and repay the financing without resorting to asset sales," the advertisements said.
"If you consider our offer carefully--if you look at the facts--we are sure you will agree that the Coastal offer is in your best interest," said the open letter, which was signed by O. S. Wyatt Jr., Coastal chairman and chief executive.
Arthur Seder Jr., ANR chairman and chief executive, on Thursday sent a letter to shareholders urging them to put off deciding whether to accept Coastal's offer.
ANR's SEC filings also showed that the company has paid its New York investment bankers, First Boston Corp. and Goldman, Sachs & Co., $2 million.
Should Coastal succeed in acquiring 20% of ANR's shares, Goldman Sachs would receive a fee based on the value of the transaction, which could exceed $7 million, and First Boston would receive a $6-million fee.
In a related event, Standard & Poor's said it placed both American Natural Resources and Coastal on its "Credit-watch" surveillance list with negative implications.