Intergroup Sets Up Barrier to Leucadia Bid : Wants New Stock to Go to Friendly Holders
National Intergroup Inc. has moved to place about 25% of its common stock in the hands of friendly shareholders to fend off unwanted takeover attempts, the Pittsburgh-based steel holding company said Tuesday.
The disclosure follows the news Monday that Leucadia National Corp., a dissident shareholder that already owns 9% of National Intergroup’s stock, wants to buy the other 91% for $750 million, or $35 a share.
The moves are the latest indication of the bad blood between the two firms, which have been feuding for months. Leucadia’s latest unhappiness stems from National Intergroup’s plan to buy Permian Corp., a crude oil transportation company based in Houston, for $172 million.
Though National Intergroup didn’t reject Leucadia’s $35-per-share offer, it said it wanted more details before the proposal is given to its board of directors. The steel holding company wants to know in particular how Leucadia, a New York-based financial-services company, will finance the purchase.
Seeking to Diversify
National Intergroup, which owns 50% of National Steel, has been seeking to diversify into the distribution business. Late last week it announced an agreement to sell its 81% interest in First Nationwide Financial for $401 million and buy Permian for cash and newly issued common stock.
National Intergroup now says it is prepared to issue as many as 6.6 million new shares of common stock--on top of the 20.3 million already outstanding--to the shareholders of Wesray Capital Corp. and Permian.
Wesray Capital, whose chairman is former Treasury Secretary William E. Simon, is the majority shareholder of Permian; the rest of the stock is owned by Permian’s employees.
Permian’s shareholders have been given the option of buying 14% of National Intergroup’s stock as part of the $172-million sale offer. Then, a National Intergroup spokesman said, Wesray Capital has the option of buying another 11% in case of a hostile tender offer. If all of the new shares are issued, it would dilute Leucadia’s present ownership in National Intergroup to about 6%.
