Citicorp Hints at Hostile Offer for Quotron’s Stock
Citicorp’s top executive hinted Tuesday that the banking firm might launch a hostile tender offer for Quotron Systems, following Quotron’s announcement that its board unanimously rejected Citicorp’s $680-million takeover offer as inadequate.
“We could conceivably go directly to their shareholders and find out if they like the price,” Citicorp Chairman and Chief Executive John S. Reed told shareholders at the banking firm’s annual meeting in New York. There is “no reason” to believe that Citicorp would raise its $19-a-share cash price, Reed said, adding that he believes that Quotron shareholders would accept it, given that no other offers have been made.
However, Reed suggested that any tender offer would still be friendly, adding that “going directly to stockholders is not an insult to (Quotron) management in any way.” Citicorp, which wants to acquire Quotron as part of a major expansion into the lucrative and fast-growing financial information business, has said it would retain Quotron’s management.
Provides Stock Quotes
Los Angeles-based Quotron provides electronic stock quotes and other computerized business information to 88,000 brokers and other customers.
Reed’s statements, his strongest yet in the month-old takeover episode, came shortly after Quotron announced Tuesday that its board unanimously rejected the Citicorp bid and “will continue to consider various courses of action to maximize shareholder values.” Quotron had called the bid inadequate on March 27--nine days after Citicorp announced the offer--but stopped short then of rejecting the bid outright.
Quotron Chairman and Chief Executive Milton E. Mohr said Tuesday that the decision to reject Citicorp’s bid came at a board meeting Monday, after “intensive discussions” in the last several days between Quotron and Citicorp representatives failed to result in Citicorp raising its price.
Analysts said a Citicorp tender offer would probably succeed, given the large percentage of Quotron’s shares now owned by professional arbitrageurs who bought shares after Citicorp’s bid was announced and hope to cash in a short-term profit by selling to the highest bidder. No other suitors have come forward, and if Citicorp were to withdraw its offer, Quotron’s shares could drop as low as $13 a share, some analysts said.
Shareholders to Meet
Any indication of shareholder displeasure with Quotron’s rejection of Citicorp’s bid might come today in Los Angeles at Quotron’s annual shareholders meeting.
Quotron’s stock price closed at $18.75 a share, down 62 1/2 cents, in over-the-counter trading Tuesday. The fact that the price did not fall further is a possible indication that arbitrageurs and other traders still believe that a takeover is likely, some analysts said.
“If they (Citicorp) do a tender offer, they’ve got the company,” said one New York arbitrageur who has bought and sold Quotron stock in recent weeks. He said such an offer may not come until Citicorp receives Federal Reserve Board approval for the acquisition, which could come next month.
“If Citicorp wants Quotron bad enough and feels the price is right and doesn’t see other bidders, it will go ahead with a tender offer,” predicted William J. Welsh, a banking analyst with the New York investment research firm of Sanford C. Bernstein & Co.
