TransTechnology Makes Bid for N.Y. Defense Firm
TransTechnology, a Sherman Oaks-based aerospace and defense firm, Wednesday offered $18.2 million for control of Lundy Electronics & Systems, a defense and electronics firm in Glen Head, N.Y.
The unsolicited, $14-a-share offer for 1.3 million Lundy shares follows an unsuccessful, three-year effort by TransTechnology Chairman Arch C. Scurlock to buy Lundy’s defense products division.
After being spurned several times, TransTechnology in late 1984 started slowly accumulating Lundy’s stock. Last December, the Sherman Oaks company nearly doubled its stake to 746,800 shares, or about 25% of Lundy’s 3 million shares outstanding.
If successful in its tender offer, TransTechnology would own 2.05 million, or 68%, of Lundy’s shares. Under New York law, TransTechnology can force a merger if it owns two-thirds of the stock, Scurlock said. A Lundy spokesman referred questions to the firm’s attorney, who did not return a reporter’s telephone calls.
Friendly Relationship
In an interview, Scurlock described his relationship with Lundy President Edward J. Mulvey as friendly, although he added that he has become increasingly irked that Lundy’s management does not consult him on major company decisions, despite TransTechnology being Lundy’s largest shareholder.
“It got to the point where we decided we’d like to gain control of the company. They’re not the entity that owns the company. It’s us,” Scurlock said. TransTechnology’s offer is 50 cents a share below Lundy’s closing price Wednesday of $14.50 a share.
Long Beach businessman Nickolas Edwards, Lundy’s second-largest shareholder with 8% of the stock, called TransTechnology’s offer “on the cheap side.”
And Charles A. Leeds Jr., an arbitrageur with the New York brokerage of Herzfeld & Stern, agreed with Edwards, calling it a “meaningless bid” that will probably fail unless it is raised.
False Radar Images
The defense products division that Scurlock wants to buy from Lundy makes aluminum-coated glass fibers that produce false radar images when emitted from an airplane. Scurlock believes it would fit well with a TransTechnology division that makes flares that are shot from planes to divert heat-seeking missiles.
Documents filed Wednesday with the Securities and Exchange Commission show that Lundy expects the division to have $13.7 million in revenue in the fiscal year that ends next June 30 and an operating profit of $2.9 million. Scurlock said the figures include a one-time gain of about $600,000 from the sale of some land.
In the fiscal year ended last March 31, TransTechnology had $110.7 million in sales and made an $8.4-million profit. In its fiscal year ended June 30, Lundy had net sales and revenue of $49.6 million and a profit of $1.9 million.
