The price of USG Corp. shares rose by more than $2 Wednesday on rumors that the gypsum products manufacturer is Wickes Cos. Chairman Sanford C. Sigoloff's latest quarry.
Wickes, a lumber and building materials company that operates the Builders Emporium chain, was said to be preparing an offer of between $52 to $54 a share for Chicago-based USG, the nation's largest maker of gypsum products, sources on Wall Street said.
USG shares closed up $2.875 at $43 in heavy trading on the New York Stock Exchange. Wall Street sources said USG's share price closed substantially lower than the rumored bid because the offer is expected to include low-interest "junk" bonds and securities worth less than cash.
Wickes shares closed at $4.50, up 37.5 cents as 717,000 shares changed hands on the American Stock Exchange, where it was the second most actively traded issue.
Wickes Declines to Comment
Michael Sitrick, a spokesman for Santa Monica-based Wickes, declined to comment, and Thomas Sleeter, manager of investor relations for USG, said: "We have had no contact with Wickes, formally or informally. No phone calls, no letters, nothing." He said the company knew of no reason for the jump in its stock price.
A Wickes bid for USG would come as no surprise, analysts said. The company has recently attempted to buy two building materials companies, National Gypsum and Owens-Corning Fiberglas. Further, Sigoloff, has said he plans to make an acquisition by the end of this year.
USG reported income of $223.7 million on sales of $2.5 billion for 1985. Besides producing 35% of the nation's gypsum products, the company also makes wood fiber and steel construction materials. It purchased Masonite Corp., a maker of hardboard siding, in 1984.
Wickes reported income of $76.1 million on sales of $2.8 billion for the fiscal year that ended last Jan. 25.
In April, Wickes failed in its effort to buy National Gypsum for $54 a share when that company's board approved a management buyout valued between $70 and $72 a share. Last month, Wickes withdrew a $74-a-share bid for Owens-Corning Fiberglas when that company's board announced a plan to sell its aerospace business group and give shareholders $52 in cash and debentures with a face value of $35, plus shares in the recapitalized company.
Les Werkstell, an analyst with the First Manhattan investment firm in New York, estimated that USG's shares were worth between $50 and $60 a share.
Analysts said USG, as a leading maker of building materials, would be a good fit with Wickes, which sells building materials through its retail stores. But a number of analysts expected USG to resist any takeover effort from Wickes.