Kaiser Cement in Search of Ways to Fend Off Murdock

Girding to meet a threatened loss of control to Los Angeles financier David Murdock, the management of Oakland-based Kaiser Cement began looking Wednesday at defensive alternatives--including a “white knight” or a sale of key assets.

The fifth-largest U.S. cement producer announced the hiring of First Boston Corp. as its financial adviser, with the “overall objective to maximize shareholder values.”

Citing Murdock’s disclosure Tuesday that he has acquired 22.1% of its stock and his declared intent to raise that to 30%, Kaiser Chairman Walter E. Ousterman Jr. said:

“We intend to take all steps necessary to prevent any change in control . . . without an appropriate control premium being paid to all our stockholders.”

Shareholders Reap Benefit

Murdock specifically said in a 13D filing Tuesday with the Securities and Exchange Commission that he had no present intention of making tender or merger offers for Kaiser.

Meanwhile, all Kaiser shareholders reaped a quick paper benefit from the Murdock-engendered activity as the company’s stock hit a 52-week high of $19.25 a share on Wednesday before closing at $19.125 on the New York Stock Exchange.

First Boston “is reviewing all . . . strategic alternatives, including the possible acquisition of the company or the sale or disposition of certain assets,” Kaiser’s announcement said.

Ousterman, who also is Kaiser’s president and chief executive, said in the same announcement:

“Any action we take will depend on what we decide is feasible and in the best interests of Kaiser Cement’s stockholders.”

The chief executive was not available for an interview, and company spokesman Tom O’Connor would not elaborate on the prepared statement. The next largest shareholder in Kaiser, with about 10% of its stock, is a Hong Kong group, Manifact Holdings.

Murdock, who was reported traveling and unavailable for comment, has proved himself to be a formidable adversary in business.

The wealthy entrepreneur and real estate developer has had the resources to muster hundreds of millions of dollars to buy outright such large companies as Cannon Mills, Flexi-Van and Castle & Cooke in recent years.

With one of those, Flexi-Van, the management found itself unable to cope with an unfriendly takeover by Murdock. He went to the mat with management in April, 1983, after building a holding of nearly 30% of the firm’s stock and having himself named chairman. When he sought to name the management slate for election to the board, the directors voted him out as chairman.

Board Surrendered

During the ensuing three weeks, Murdock poured in another $30 million and raised his stock position to 42% from 27%. The board hoisted a surrender flag and turned over control to him.

No one from Murdock’s organization would discuss Kaiser Cement, which has had far from smooth sailing in business in recent years. Much of this has been attributed by observers to low cement prices caused by industry overcapacity and heavy foreign competition.

After two years of deficits, the company showed a modest $12.5-million profit last year, but only because of the sale of some assets. Kaiser had 1985 revenue of $248 million.