Stock Purchase Gives Simmons Majority Stake in NL Industries

Dallas investor Harold C. Simmons acquired control of NL Industries on Friday by raising his stake to 51.1% of the company’s common stock, Simmons’ lawyer said.

Simmons lifted his interest in the chemicals and energy services company from 27.7% by purchasing 14 million additional common shares of NL in the open market, said his lawyer, J. Landis Martin.

The additional stock, purchased for $4.50 a share, or $63 million, increased Simmons’ holdings to 30.57 million shares, or 51.1% of NL’s 60 million shares outstanding.

Martin said the 14 million shares were sold to Simmons in a single private transaction; he said he did not know the seller’s identity. It is possible that a brokerage firm, or some other institutional investor, had earlier purchased the stock from various investors for sale in a single block to Simmons.

NL officials could not be reached for comment. The announcement of Simmons’ purchase was made after 5 p.m. EDT, and telephone calls to NL’s headquarters here went unanswered.

Simmons’ purchase of the additional stock was the latest move in a seven-week battle between the investor and NL, which has fiercely attempted to retain its independence.

Simmons initially made a tender offer for the NL stock that he did not already own. NL rejected the bid and proposed to spin off its chemicals business to its stockholders as an alternative to Simmons’ offer.

To expedite the spinoff, NL issued the holders depositary receipts that represent their equity interest in the business. The receipts, which now trade separately from NL’s common stock, were later to be exchanged for stock in the chemicals unit once that stock was registered with the Securities and Exchange Commission.

Thus, NL’s common stock is now trading adjusted for the proposed spinoff, and it closed Friday at $3.62 1/2 a share, down 12 1/2 cents, in New York Stock Exchange composite trading. The chemical unit’s depositary receipts fell 25 cents a share to $11.50.

However, the chemicals business technically is still part of NL Industries, and it was not immediately known if Simmons would attempt to take control of NL’s board and then try to scrap the spinoff plan.