Edelman Sweetens Offer for Fruehauf by $1 a Share
New York investor Asher B. Edelman, spurning a buyout of his stake by Fruehauf Corp., on Thursday raised his offer for the company to $49.50 per share, $1 per share more than Fruehauf had proposed in a plan to go private.
Edelman, in a letter to the company’s directors, said he would pay the higher amount for shares in the truck-trailer maker under terms similar to those announced Wednesday by Fruehauf.
The company said Wednesday that it had formed a company, LMC Holdings, owned by Fruehauf managers and Merrill Lynch & Co., to pay $1.1 billion in cash and securities, or $48.50 a share, for Fruehauf’s common stock. Fruehauf said it might elect to pay cash for all of the company’s shares.
Edelman said he would pay $49.50 a share in cash for 78% of Fruehauf’s shares and would exchange securities for the remainder. Edelman also said he might alternatively negotiate an increase in his cash tender offer for all of Fruehauf’s common stock from its present $44 per share to $49.50 per share.
“Each of the Edelman proposals is conditioned on endorsement by Fruehauf’s directors,” a statement issued by Edelman said.
Edelman said he was willing to begin negotiations immediately on his proposals and gave Fruehauf’s board until 10 a.m. EDT Monday to respond.
Lawrence Rand, a spokesman in New York for Detroit-based Fruehauf, said: “We have no comment right now.”
Edelman’s proposal added nearly $23 million to the amount offered by Fruehauf in its plan to go private to escape a hostile takeover.
The New York investor owns more than 9% of Fruehauf’s shares, and brokerage analysts have estimated that he would stand to profit by about $24 million by accepting the Fruehauf buyout.
Edelman’s sweetening of his offer was the latest step in a takeover battle that has simmered since March, when he first sought to negotiate a $41-per-share purchase of Fruehauf.
Directors of the company throughout the dispute have rejected Edelman’s bids, questioning his ability to get financing for such a transaction and declaring that the offers were not in the best interests of shareholders.
