Anderson, Clayton Rejects $655-Million Takeover Bid

Times Staff Writer

Anderson, Clayton & Co, a Houston food products company, said Friday that its board rejected a $655-million takeover offer from two New York investment banking firms at a hastily called board meeting Thursday.

Anderson, Clayton directors, however, authorized its management to meet with representatives of the investment firms Bear, Stearns & Co. and Gruss & Co. By late Friday, no meeting had been scheduled, but “there’s always the possibility,” said Stephen Jacobs, a New York lawyer representing Bear, Stearns and Gruss.

The two firms announced a bid Thursday for the Houston company, which makes Gaines dog food, Chiffon margarine, Seven Seas salad dressing and Igloo ice chests. They also announced plans to help finance the deal by selling the Gaines unit to Quaker Oats.

Meanwhile, an Anderson, Clayton shareholder group filed a lawsuit in Delaware Chancery Court late Friday to block a June 3 shareholder vote on a recapitalization plan. Under the plan, shareholders would receive cash and new stock worth $45 a share. Bear, Stearns and Gruss have offered $54 per share.

“Our argument is that the offering price of the management plan is unfair,” Robert Harwood, the lawyer representing the shareholders, told the Reuters news service. “You don’t need a computer to see which is better.”


Harwood said he is asking the court to issue an injunction Monday that would block the shareholder vote.

Also on Friday, Bear, Stearns and Gruss disclosed in documents filed with the Securities and Exchange Commission that they own 5.93% of Anderson, Clayton. The documents indicate that the investment firms paid an average price of $53.28 a share for the 724,147 shares that they began buying March 17.

Bear, Stearns and Gruss also revealed that Quaker Oats has agreed to pay $238 million for Gaines, a move that would make Quaker Oats the nation’s No. 2 pet food company. In their SEC filing, the investment firms said they might sell other Anderson, Clayton businesses, although they don’t have any plans to do so.