Frates Group Drops Kaiser Aluminum Bid : Firm Says Holders Voted 4 1/2 to 1 Against Takeover

Kaiser Aluminum revealed Thursday that it beat by a margin of more than 4 1/2 to 1 a dissident shareholder group that was trying to toss out the Oakland company’s board of directors at last month’s annual meeting.

Meanwhile, the shareholder group led by Oklahoma investor J. A. Frates said that it is withdrawing its $28-per-share offer to buy the company but that it has not sold its 21.5% stake in the nation’s third-largest aluminum producer.

“We remain interested in acquiring control but believe we’re under no time pressure to act,” said Leonard Conway, a member of the Frates group. “We believe the burden of performance is on the management. . . . We’ll be very interested in seeing if they can produce the results that they’ve said they can achieve.”

The Frates group is discussing its alternatives--including selling its stock, buying more stock or taking on another partner and making a new offer--and will make a decision “based on our deliberations and their (Kaiser management’s) success or lack thereof,” Conway said.

The Frates group had wanted to remove Kaiser Aluminum’s board of directors, restructure the company by setting assets and take the company private by offering a $28 package--$10 in cash and $18 in securities--for each Kaiser share.

Both sides had agreed that Kaiser Aluminum had gathered enough votes at the April 29 annual meeting to elect its 12 incumbent directors and one new nominee representing the company’s union, but the vote totals weren’t revealed until Thursday. The Frates group had nominated an opposing slate of 11.

Kaiser Chairman Cornell C. Maier said then that shareholders had “overwhelmingly” supported the company’s nominees. “When I used the word ‘overwhelmingly,’ I did not expect that it would turn out to be an understatement and that the vote would be so lopsided,” Maier said Thursday.

Each of Kaiser Aluminum’s nominees received at least 27.7 million votes, while each Frates group nominee got about 6 million votes, the company said.