Saga Snubs Bid by Marriott, Talks to Others
Saga Corp., target of a hostile tender offer by Marriott Corp., snubbed the hotel chain for the second time Friday and indicated for the first time that it is having discussions with others interested in buying the food service firm.
In announcing that Saga’s board had unanimously recommended that shareholders reject Marriott’s $34-a-share tender offer, Chairman and Chief Executive Charles A. Lynch said in a statement: “The board of directors believe there is a reasonable likelihood that a higher price than the Marriott offer can be obtained for Saga’s shares if the board pursues other available alternatives.
“Accordingly, the board of directors has instructed Goldman, Sachs & Co., Saga’s financial adviser, to continue discussions with other parties who have expressed an interest in a possible acquisition of the company.”
Earlier Offer Ignored
Saga had previously said it was only considering alternatives. A spokesman for Saga would not elaborate on what or who those alternatives might be.
A Marriott spokesman said the company had no comment.
Marriott, which has major food service and restaurant operations in addition to its hotels, began the tender offer after Saga ignored Marriott’s offer earlier this month for a friendly combination at $34 a share, or a total of $435 million.
Saga, based in Menlo Park, Calif., runs the nation’s largest food service operation serving colleges and universities and also owns the Stuart Anderson’s, Straw Hat Pizza and Velvet Turtle restaurant chains.
Saga stock closed Friday on the New York Stock Exchange at $37.25 a share, up 37 1/2 cents on a volume of 213,700. Marriott hit a new high of $178 in trading but closed at $175.50 a share, up $1 on a volume of 78,700.