Sea-Land Board Weighing Bid From Simmons
Directors of Sea-Land met late Monday to discuss a $585-million takeover offer by a Texas financier, a bid called “most unwelcome” by the company but characterized as friendly by a spokesman for the investor.
The shipping company’s board was considering a $25-a-share buy-out offer by Dallas financier Harold Simmons, who already controls about 25% of Sea-Land.
Sea-Land officials declined to comment on the offer, which was announced by the company Nov. 19.
But the Wall Street Journal quoted “sources close to the company” as saying that the board probably would reject the bid. The newspaper also quoted the sources as predicting that the board would take steps to protect the company against a takeover attempt.
Among the possible defenses was a leveraged buy-out, the sources said.
Sea-Land Chairman Joseph F. Abely Jr. previously called Simmons’ interest “most unwelcome.”
But J. Landis Martin, a Denver lawyer representing the financier, said last week that the takeover attempt was a friendly one.
Simmons increased his Sea-Land holdings Friday to 5.8 million shares, or 24.9% of Sea-Land’s stock.
Martin said Simmons had not decided what course to take if his offer is rejected, but “a possible option” would be to seek control through open-market stock purchases even above the $25 tender offer.
Sea-Land’s stock closed at $24.25 a share Monday on the New York Stock Exchange.
Simmons began buying Sea-Land stock last spring, and takeover rumors about his interest in the company buoyed its stock despite mediocre earnings.
Sea-Land is expected to post a loss or to break even for the fourth quarter of this year.
The domestic-based ocean shipping business has suffered from the strong U.S. dollar, which has boosted the import market over exports. The industry also has been hurt by overcapacity and rate cutting.
Simmons’ principal holdings include Medford Corp., a timber company in Medford, Ore.; Amalgamated Sugar Co., Ogden, Utah, and LLC Corp., a steel and fast-food corporation in Atlanta.