Owens-Corning CEO Lets Pink Panther Be the Star

Wickes Chairman Sanford C. Sigoloff became a household face in Southern California by appearing as the awe-inspiring boss in TV commercials for the company’s Builders Emporium stores, in which a chorus of employees shouted: “We got the message, Mr. Sigoloff!”

His spotlight-capturing style is in stark contrast to that of William W. Boeschenstein, chairman of Owens-Corning Fiberglas, the building products manufacturer for which Wickes made an unsolicited $2-billion bid two days ago.

In 13 years of running Owens-Corning, Boeschenstein, 60, has maintained a low profile, developing a reputation as a tight-lipped, conservative manager who shuns the public eye. Far from using the CEO as a spokesman for fiberglass insulating materials, one of its main products, Owens-Corning five years ago adopted a cartoon mascot--the slinky, silent Pink Panther.

Boeschenstein’s only public statement about Wickes’ $70-a-share offer indicates that he won’t tiptoe away from this potential showdown.

In a statement Wednesday disclosing Owens-Corning’s intention to consider “all available alternatives” to the takeover, including a “fundamental change” in the company’s business structure, Boeschenstein (pronounced BESH-en-stine) said:

“We strongly believe that the current management team, which knows our businesses intimately, is far more qualified than any outsider to assess and implement any such program.”

Both companies kept their counsel Thursday. A spokeswoman for Owens-Corning, based in Toledo, Ohio, said company officials met with advisers but would have no announcement. She declined to comment on whether Owens-Corning has talked to Wickes since the proposal was made by Sigoloff in a phone conversation Tuesday afternoon.

In trading on the New York Stock Exchange, Owens-Corning shares continued their forward march, closing up $2.50 a share at $77; with 3.3 million shares traded, the issue was the exchange’s most active. Shares in Santa Monica-based Wickes, the volume leader on the American Stock Exchange, fell 25 cents to $5.25.

(Separately, Standard & Poor’s said it has placed some of Owens-Corning’s debt on “creditwatch” with the possibility of a downgrade. The rating agency noted: “If Wickes is successful, the combined entity could have debt in excess of $3.8 billion, which would exceed 75% of total capitalization. In that case, Owens-Corning’s ratings would fall below investment grade.” The agency added that potential defensive measures could also significantly increase financial risk.)

Meanwhile, Wall Street observers hesitated to guess what will happen next, although they agreed that Boeschenstein isn’t likely to give in without a fight.

May Seek ‘White Knight’

“The most logical thing, if Owens-Corning chose to reject Wickes’ offer, would be to seek a ‘white knight’ that has a management structure and philosophy consistent” with Owens-Corning’s decentralized approach, said Daniel D. Bayston, an analyst with Duff & Phelps in Chicago.

Bayston views Owens-Corning’s full value as $75 a share and said that “Sigoloff has certainly left the door open” for Wickes to make a higher bid.

In Bayston’s opinion, the company’s growth rate will continue to be modest for a long time. “The earnings are quite volatile, reflecting the cyclical residential and commercial construction markets, which are highly sensitive to interest rate fluctuations,” he said. Another weakness, he said, is that the residential roofing market continues to suffer from overcapacity and isn’t likely to improve significantly over the next few years.

He cited among the company’s strengths its dedication to developing new applications for its products and a strong brand awareness among consumers.

At Paine Webber in New York, analyst H. Edward Schollmeyer has been bullish on Owens-Corning for some time. He said a costly modernization program is beginning to pay off in improved profit margins, which had fallen sharply in the last couple of years. The company also has finally pared some excess employees, he said.

Although some analysts don’t see the companies as an automatic match, they agree that Sigoloff appears to be going after Owens-Corning’s roofing and insulation businesses, which would fit with Wickes’ retailing operations. Wickes also has interests in lumber, home furnishings, apparel and manufacturing.

Owens-Corning--formed in 1938 as a joint venture of Owens-Illinois and Corning Glass Works--is the world’s leading producer of fiberglass products and is considered to have the largest share of the residential roofing market. It also makes fiberglass-reinforced plastics for use in boats, cars and skis.

Other products include molded fiberglass-reinforced tubs and showers, common in hotel chains and new apartment buildings, and fiberglass stabilizers used in computer circuit boards.

Spacesuit Material

In Bakersfield, the company produces fiberglass-reinforced underground petroleum storage tanks, which an increasing number of gasoline stations are buying to replace decaying steel models. (Owens-Corning has 19 manufacturing, sales and supply facilities in California, with total employment of 2,600.)

The company also developed a non-flammable material for the Apollo astronauts’ spacesuits after the 1967 deaths of Virgil I. (Gus) Grissom, Edward H. White II and Roger B. Chaffee. In 1974, it devised insulation for the above-ground portion of the Alaska pipeline.

Since 1978, it has been producing “fabric structure” covers made of Teflon-coated woven fiberglass for sports facilities and public buildings. One project was the tent-like, 105-acre roof system for the Haj terminal at the King Abdulaziz International Airport in Jiddah, Saudi Arabia. (Another was the roof over the modernistic Bullock’s store in San Mateo, which has been plagued by seepage and other problems, reportedly caused by design flaws unrelated to the fabric itself.)

Last year, Owens-Corning paid $418 million for Armco’s aerospace and strategic materials division. It reportedly is close to selling much of that business.

Schollmeyer gave high marks to the company’s conservative accounting procedures, which have reduced earnings in the short term but could help the company considerably when the new tax legislation is passed. Competitors who have used up investment tax credits each year will suddenly lose that option, whereas Owens-Corning, which has amortized its credits over several years, will still have access to them for a few more years.

Schollmeyer projects that earnings will rise to $5.16 a share this year from $4.42 last year. In 1987, he said they could be as high as $5.75 to $6.

OWENS-CORNING FIBERGLAS AT A GLANCE

Owens-Corning, based in Toledo, Ohio, is the world’s leading manufacturer of glass fiber products, including fiberglass insulation, acoustical panels and other construction and industrial products.

Assets:.............$2.4 billion Employees:................25,200 outstanding:........29.8 million

12-mo. price range (NYSE):

$32.12 1/2 -- $77.00 Thursday’s close:.........$77.00 up $2.50