Frates Group Details Plans to Shrink Kaiser
An investor group that is trying to take over Kaiser Aluminum & Chemical said Wednesday that, if successful, it intends to sell, refinance or joint venture several Kaiser operations, including some in Southern California.
The group, led by Oklahoma investor J. A. Frates, has repeatedly said it plans to shrink Kaiser Aluminum, focusing on the Oakland-based company’s aluminum and industrial-chemicals businesses, to pay off $1 billion in debt over several years.
Will Consider Sale
The Frates group previously had said it would consider the sale, refinancing or joint venturing of Kaiser Aluminum’s real estate operations and its oil and gas business. But in consent materials sent to Kaiser shareholders Wednesday, the group revealed that it also has targeted Kaiser Aluminum’s Harshaw-Filtrol Partnership, a specialty chemicals partnership formed in 1983 with Chevron, and all or part of the company’s European aluminum operations.
The Frates group, which has offered to exchange each share of Kaiser Aluminum common stock for $21.50 in cash and securities, is trying to oust Kaiser Aluminum’s board and replace it with its own slate of 11 directors.
The group has until March 22 to solicit a majority of shareholder votes to replace Kaiser Aluminum’s board.
Cornell C. Maier, Kaiser Aluminum’s chairman and chief executive, said the consent materials contained “nothing new.”
“We have said previously that the communications from the (Frates) group don’t constitute an offer and that they are extraordinarily vague and subject to many conditions,” Maier said in a statement. “Today’s materials further confirm this. This letter and proxy are at least as conditional and speculative as their previous communications and perhaps more so.”
Holdings in Southland
Of the assets targeted by the Frates group, much of the company’s real estate holdings and some of the operations of the Cleveland-based Harshaw-Filtrol Partnership are in Southern California, a Kaiser Aluminum spokesperson said.
Kaiser Aluminum owns several industrial and commercial properties in the Southland as well as the 29,000-acre, multipurpose Rancho California development in Riverside. Harshaw-Filtrol operates a color-products factory in Vernon and a catalyst and research and development facility in Sylmar.
