American Pacific May Sell Its Real Estate Operations

In an attempt to make itself more attractive to public investors, Irvine-based American Pacific Corp. said Wednesday that its board of directors is considering the sale of its real estate and housing operations to its chairman and principal stockholder in an approximately $10-million stock transaction.

“Basically it is our feeling the stock market doesn’t value real estate companies fairly,” said American Pacific Vice President Paul L. Winther. So, he said, the plan is for American Pacific to do business exclusively as a chemical manufacturer and to move to Nevada.

In the midst of the 1982 real estate recession, Winther said, American Pacific acquired Pacific Engineering and Production Co. of Nevada, which manufactures and sells ammonium perchlorate, a chemical used in solid rocket fuel for the NASA space shuttle and other Department of Defense programs.

American Pacific’s real estate divisions posted operating earnings of $3.3 million on sales of $57.8 million in the company’s last fiscal year, which ended Sept. 30. In the same period, the chemical manufacturing subsidiary posted operating earnings of $2 million on revenues of $12.5 million.

But in the last quarter, ended March 31, American Pacific recorded a loss of $1.5 million from continuing operations, which Winther blamed in large part on a real estate slump. He said that although the last quarter’s downturn in housing sales was less disastrous than in 1982, it forced the company to offer price concessions. Last quarter’s results, he said, reflect the roller coaster nature of the housing industry that discourages American Pacific investors.

Winther said the divestiture proposal was submitted Wednesday to the company’s board of directors by John E. Wertin, American Pacific’s chairman and chief executive.

The plan calls for Wertin to acquire the company’s home building operations in exchange for all of his stock in the company. Wertin currently owns 2.95 million shares of American Pacific, or 47% of the company’s 6.2 million outstanding shares. American Pacific stock most recently has traded at $3.50 a share in over-the-counter transactions.

Under Wertin’s proposal, he would resign his positions as chairman and chief executive officer of the company following his acquisition of American Pacific’s home building arm. Those titles would be transferred to Fred D. Gibson Jr., vice chairman and president of Pacific Engineering & Production Co.

American Pacific’s corporate headquarters would move to Pacific Engineering’s facility in Henderson, Nev., while the real estate operations sold to Wertin would function under a different name in Irvine, Winther said.

Winther said the proposal to restructure and sell some of American Pacific’s assets would have to be approved by the company’s board of directors and stockholders as well as the company’s major lenders.

“The proposal is subject, among other things, to consideration by the company’s board, the execution and delivery of a definitive agreement and plan, and approval by a committee of independent directors--who will obtain an independent opinion or report on the fairness of the transactions to stockholders other than Wertin . . . ,” the company said in a prepared statement.