Hanson Lists a Condition to Higher SCM Bid

Hanson Trust PLC would make a better bid than the $74-a-share tender offer that another bidder has made for SCM Corp. if an option under which the rival group can buy one of SCM’s two best business lines is withdrawn, an attorney for Hanson Trust said Monday.

Dennis J. Block, a lawyer for London-based Hanson Trust, did not specify to a federal appeals court or in a later telephone interview what the better offer might be.

Herbert Katz, a spokesman for SCM, said the company had no comment on Block’s statement.

Hanson Trust appeared in the U.S. 2nd Circuit Court of Appeals to argue that an injunction blocking it from making additional purchases of SCM stock should be dissolved. The three-judge panel heard arguments but made no decision.

An investment group formed by Merrill Lynch & Co. and including members of SCM’s management launched a tender offer last week of $74 per share in cash for 80% of SCM’s 12.25 million shares and high-yielding bonds for the remainder.

It was the second time that a Merrill Lynch-led group had topped an offer for SCM by Hanson Trust, which sells building materials, construction equipment, textiles, shoes and consumer products.

Last month, Hanson Trust had offered $60 a share in cash for SCM’s stock.

But SCM, which produces typewriters, food and chemicals, called the offer inadequate. Merrill Lynch and members of SCM management countered with a buy-out plan to take the company private in a leveraged buy-out offering a combination of cash and high-yielding bonds.

Hanson Trust responded by increasing its offer to $72 a share in cash, and the Merrill Lynch-led group then devised its second offer at $74 a share in cash and bonds.

Hanson Trust then withdrew its bid and bought SCM shares, boosting its stake to nearly 30%. It could block the Merrill Lynch deal if it acquired more than one-third of SCM’s stock.

But SCM obtained an injunction blocking Hanson Trust from making further purchases or voting the shares it already owns.

Last week, SCM granted the Merrill Lynch group an option to buy the company’s food and pigments businesses for $430 million.