Holder Meeting Postponed in Light of Wickes’ Bid : Gypsum Delays Buy-Out Vote
National Gypsum, target of an unexpected tender offer from Santa Monica-based Wickes, said Wednesday that it postponed a special meeting that had been scheduled for today, at which shareholders were to vote on management’s proposed buy-out of the company.
The building products and services company, which has headquarters in Dallas, said that “in view of the announcement . . . by Wickes Cos.,” the special shareholders meeting has been rescheduled for April 25 at 10 a.m. CST.
Wickes said Tuesday that it intended to offer $54 cash per share, or a total of $1.23 billion, for all of National Gypsum’s stock. Shareholders were to have considered a leveraged buy-out offer, previously approved by National Gypsum’s directors, of $41 a share and $17 face amount of subordinated discount debentures that analysts have valued at $9 to $10 a share.
In the management buy-out, led by National Gypsum Chairman and Chief Executive John P. Hayes, investors would borrow against a company’s assets to buy all of its shares.
Fueled Speculation
National Gypsum’s move to postpone the meeting fueled speculation on Wall Street that management might now increase its offer or abandon it in favor of a massive repurchase of shares to thwart Wickes. The company’s stock price continued to rise amid the uncertainty.
National Gypsum closed on the New York Stock Exchange at $57.25 a share, up $1.25. It was the seventh most active stock on the NYSE on a volume of 1.9 million shares.
Wickes closed on the American Stock Exchange at $6.50 a share, down 25 cents. It was the Amex volume leader with 8.5 million shares changing hands.
After the market closed, National Gypsum make public a letter sent to Hayes by Alvin G. Segel, senior vice president and general counsel of Wickes. The letter said Wickes directors had authorized the $54 offer for National Gypsum shares outstanding “other than those owned by Wickes or any of its subsidiaries.”
It was the first acknowledgement by Wickes that it had already purchased National Gypsum stock. The company declined to say how much National Gypsum stock it now owns. But a source close to Wickes said the company had acquired about 300,000 shares for about $15 million on the open market Tuesday.
Allan V. Cecil, National Gypsum’s spokesman, declined to say whether National Gypsum had replied to the letter or had received a revised offer from Aancor Acquiring Corp., the company formed to make management’s leveraged buy-out.
He added that no meetings have been arranged either with Wickes or with a special committee of outside directors who recommended the management buy-out proposal late last year.
Management’s proposal was triggered last fall by rumors that National Gypsum was the target of a possible takeover when the wealthy Belzberg family of Canada reportedly acquired a stake in the company.
John Stanley, an analyst at Wertheim who follows National Gypsum, said: “We pointed out the management offer was not as preemptive as it was six months ago, before the stock market took off. Most other building stocks are up 60% to 70% over that time. Most are selling at higher multiples than the National Gypsum (management) offer. The fact that someone caught onto it is not surprising.”
Wickes Chairman and Chief Executive Sanford C. Sigoloff has made it known recently that he wanted to make a major acquisition, either to diversify or to expand Wickes’ existing three businesses: lumber and home furnishings, manufacturing and automotive parts distribution and apparel and hosiery.
A successful acquisition of National Gypsum would transform Wickes into a major building products company with 80% of its revenues derived from the building supply business.
“It’s a very simple fit,” explained Lloyd Kanev, an analyst at Smith Barney, Harris Upham & Co. in New York who follows Wickes. “You can see National Gypsum fits right in with Wickes’ lumber and home furnishing groups.”
Last year, National Gypsum disclosed plans to divest a number of divisions, including Binswanger Glass, Binning’s Building Products and National Gypsum Energy.
The company plans to concentrate on three core businesses: Gold Bond Building Products, a manufacturer and marketer of gypsum wallboard; American Olean Tile, a tile maker and distributor, and Austin Co., which provides construction services.
Separately, Standard & Poor’s said it placed National Gypsum’s BB- rated industrial revenue bonds and the B rating on its proposed $387 million of subordinated discount debentures on its “Credit-watch,” which could lead to a downgrading.
NATIONAL GYPSUM AT A GLANCE The Dallas-based company is a major manufacturer of building products, including wallboard, siding, tile, wallcoverings and aluminum windows and doors. Gypsum and related products account for about 35% of sales.
Year ended Dec. 31 1985 1984 1983 (in millions) Sales $1,340 $1,272 $930 Income from continuing 116 95 49 operations
Assets: $506 million
Employees: 13,400
Shares outstanding: 23.2 million
12-mo. price range (NYSE): $25--$57.25
Wednesday’s close--$57.25
