Saga Corp. Takes Weekend to Consider Marriott Offer

Saga Corp. said Friday that its board of directors needed more time to evaluate Marriott Corp.’s $435-million buyout offer, a move that analysts said indicated that the Menlo Park, Calif., firm is holding out for a better price.

The board considered the $34-a-share offer from Marriott at a regularly scheduled meeting of directors on Friday. Saga said the board’s move was intended to allow sufficient time “to fully and adequately consider the Marriott offer, as well as other alternatives.”

A Saga spokesman would not comment on whether the company has received or is seeking other offers. The firm runs the nation’s largest food service operation serving colleges and universities and owns the Stuart Anderson’s, Straw Hat Pizza and Velvet Turtle restaurant chains.

The company’s restaurant and food service combination fits well with Marriott, which also has major food service and restaurant operations in addition to its hotels, analysts said.

Marriott made the unsolicited offer for all 12.8 million outstanding shares of Saga on Wednesday. It requested a response no later than 2 p.m. PDT on Monday.

A spokesman for Marriott at the company’s headquarters in Bethesda, Md., declined to comment on Saga’s announcement.

Saga’s stock price has soared in response to the offer, which shows that “the market is telling Saga and Marriott that the price ought to be higher,” explained Ward P. Lindenmayer, an analyst with S. G. Warburg in San Francisco.

Saga closed Friday on the New York Stock Exchange at a new high of $37.62 1/2, up $1, on a volume of 1.2 million shares. Its price had been $29.50 a share before Marriott’s offer. Marriott closed Friday on the NYSE at $169.37 1/2, up 37 1/2 cents, on a volume of 49,900.

Analysts have described the $34-a-share offer as low, but “it is a starting point,” explained Lindenmayer. “You could read the board’s comments in lots of ways. I was looking for the board to leave the door open . . . and the announcement does leave the door open and pushes the ball back in Marriott’s court.”