Fresh From Victory Over SCM
Hanson Trust PLC, having won a bitter fight to acquire SCM Corp., turned its sights across the Atlantic on Thursday to pursue its $2.8 billion hostile takeover of Imperial Group PLC of Britain.
SCM, a New York-based maker of chemicals, coatings and office equipment, agreed Wednesday night to transfer control after Hanson, a London-based conglomerate, acquired more than 72 percent of SCM’s stock.
Hanson forged ahead with its $75-a-share, $927.5 million tender offer for SCM this week after SCM’s effort to thwart Hanson and merge instead with a friendly suitor, an investor group led by Merrill Lynch & Co., was effectively blocked by a federal appeals court.
Merrill Lynch on Thursday formally dropped its $74-a-share merger agreement with SCM as well as litigation pending between the parties.
Despite its losing cause, “we’re pleased we were able to be helpful to the shareholders of SCM,” said Kenneth H. Miller, head of mergers and acquisitions at Merrill Lynch. “We think Merrill Lynch made the difference between (stockholders receiving) $60 and $75 a share.”
Hanson launched the battle for SCM last August by offering $60 for each of SCM’s 12.4 million common shares outstanding.
“Now that the long and distracting episode is complete, we intend to turn our full efforts to serving our customers,” SCM Chairman Paul H. Elicker said in a statement. “All members of SCM’s management are committed to providing the Hanson shareholders with an excellent return on their SCM assets.”
Hanson said Elicker and SCM President D. George Harris would continue in their current positions.
In an interview, Sir Gordon White, chairman of Hanson’s North American interests, said it was too early to say whether Hanson would divest any SCM assets it considered unproductive.
“We’re investigating the company and getting full cooperation from its management,” he said.
Hanson, with a range of interests including building equipment, consumer products and food processing, now will step up its pursuit of Imperial Group, White said. And it appears that fight could match the hostility of the SCM battle.
Imperial, a major tobacco and brewing company whose cigarette brands include John Player, immediately rebuffed Hanson’s Dec. 9 offer as “unwelcome and totally inadequate.”
The Hanson bid was part of a spate of major merger proposals that swept through Britain in early December. Imperial itself agreed to purchase United Biscuits (Holdings) PLC, a leading British food-products concern, for $1.9 billion only days before Hanson unveiled its offer.
Hanson is now trying to persuade Imperial’s stockholders to reject the United Biscuits agreement and to accept its proposal.
