Wagner’s Offer Turned Down by Panhandle

Wagner & Brown’s unsolicited offer to buy Panhandle Eastern for $50 a share, or $2.25 billion, was rejected as inadequate by Panhandle’s board of directors on Wednesday.

The bid by Wagner & Brown, an energy concern based in Midland, Tex., and controlled by Cyril Wagner Jr. and Jack E. Brown, was disclosed by Panhandle on June 30.

A spokesman for Wagner & Brown, Grant Billingsley, said the company had no comment in response to the action by Panhandle’s board. Wagner & Brown’s offer called for each of Panhandle’s 44.9 million common shares outstanding to be exchanged for $30 cash plus preferred stock with a current market value of $20.

Panhandle Eastern, a diversified energy concern, is considered a relatively attractive target because of its Anadarko Petroleum subsidiary, which holds a major stake in the rich Hugoton natural gas field centered in southwestern Kansas.

Besides its gas reserves, Panhandle operates a 17,500-mile gas transmission system that serves Texas, Louisiana and the Midwest.

Should Wagner & Brown decide to continuing its a hostile bid for Panhandle, it would face several defensive measures that the company has adopted, including a “poison pill” designed to make an unwelcome takeover substantially more expensive for the bidder.