Wickes Scraps Owens Bid, Pockets $9-Million Profit : Tender Offer Dropped in Wake of Recapitalization Plan but Suitor Says It Still Might Decide to Buy More Shares

Wickes Cos. on Friday abandoned its 2 1/2-week-old tender offer for Owens-Corning Fiberglas and made a quick $9 million or so by selling a 303,700-share stake in the building products company.

The Santa Monica-based company also said it is considering the sale of 2.23 million additional shares, or about 7.5% of the Toledo, Ohio, company, that it still controls through an option acquired from Bear, Stearns & Co.

This could mark the end of a takeover battle that occupied Wickes and Owens-Corning officials for most of August. From it, Wickes emerges a little fatter in the wallet, whereas Owens-Corning will become a little leaner as the result of a restructuring and recapitalization announced Thursday to fend off Wickes’ attentions.

Wickes said Friday that it will continue to evaluate the recapitalization plan and that it might decide to buy Owens-Corning shares, depending on market conditions.

Owens-Corning’s stock, which had been climbing steadily in value since the first indications of Wickes’ interest, suffered a setback Friday. The shares fell $1.62 1/2 to $79.12 1/2. The stock was the second most active on the New York Stock Exchange with volume of more than 4 million shares.

Wickes Shares Rise

Wickes, the American Stock Exchange’s most active issue, rose 12 1/2 cents to $5.25 on volume of 1.2 million shares. Wickes paid an average of about $50 per share for the 303,700 Owens-Corning shares that it owned outright.

Although analysts said the value of Owens-Corning’s recapitalization plan is impossible to compute with any certainty, they indicated that Wickes must have considered it to be higher than its own $74-a-share, or $2-billion, bid.

“Wickes did what it had to do strategically,” said Gregory H. Kieselmann, analyst with Morgan, Olmstead, Kennedy & Gardner in Los Angeles. “Obviously, the value (of the recapitalization) is worth more than Wickes felt” it could go.

He added that “Wickes showed a lot of self-discipline in not getting caught in a bidding war.”

In April, Wickes attempted to take over National Gypsum, but several competing offers emerged. Eventually, the company agreed to a management buyout and converted to private ownership.

For the six months ended July 26, Wickes reported a pretax gain of about $3 million from the sale of its National Gypsum stake.

Analyst Jonathan Goldfarb of Merrill Lynch in New York said Owens-Corning clearly would have preferred that Wickes’ offer not come along at all. However, he said, “they consider this (the recapitalization) a good price to pay to remain independent.”

William W. Boeschenstein, chairman of Owens-Corning, said Friday: “It would appear that Wickes has recognized that we have created superior values for Owens-Corning shareholders. Obviously, we are pleased with their announcement.”

Terms of Proposal

Under the company’s recapitalization plan, each common share would be exchanged for $52 in cash and a debenture with a face value of $35, plus one share in the recapitalized company. The restructuring will concentrate about one-third control of the newly recapitalized company in the hands of management and employee stock ownership plans.

Owens-Corning shareholders are to vote on the recapitalization Oct. 9.

As part of the restructuring, Owens-Corning also plans to sell assets, including the aerospace and strategic materials group that it bought from Armco last year for $415 million. That group, based in Newport Beach, has divisions there and in Wisconsin and Oregon.

Analyst Kieselmann said an acquisition is “still a front-burner item” for Wickes, which has a war chest of about $1.5 billion. He noted that Wickes has about $450 million in tax-loss carryforwards that could be used more quickly if it buys a company that can generate substantial income.

A Wickes spokesman said Friday that the company also has terminated a suit that challenged an Owens-Corning shareholders purchase rights plan, otherwise known as a “poison pill.”