Ex-Suitor AFG Buys 4.7% Stake in Lear
AFG Partners resumed its pursuit of Lear Siegler on Thursday with a $68.1-million purchase of about 4.7% of the Santa Monica-based aerospace and manufacturing concern’s common stock.
The investment group amassed the position just two days after Wickes Cos. said it was having difficulty obtaining the financing necessary to complete its previously announced offer to buy all of Lear Siegler for about $1.7 billion in cash.
AFG Partners--an investment group composed of Irvine-based glassmaker AFG Industries Inc. and the Midland, Tex., oil concern Wagner & Brown--purchased 850,000 shares of Lear Siegler for $80.09 each in a private transaction with the Wall Street firm of Bear, Stearns & Co.
On Wednesday, AFG said it was considering launching another takeover offer for Lear, should Wickes’ deal fall apart.
Earlier, AFG Partners had acquired a 9.8% stake in Lear Siegler and said it was willing to purchase the entire company for at least $85 a share, or about $1.5 billion.
But the partnership agreed to sell that position to Wickes when the big retailing and home-products company announced its intention to acquire Lear at a much higher price than AFG wanted to pay. Wickes ultimately agreed to pay $93 a share for all of Lear’s stock.
Expects $32-Million Profit
The sale of AFG’s original position in Lear to Wickes is still in escrow, according to a spokesman for the partnership. AFG Partners stands to make a $32-million profit on the transaction.
A spokesman would not comment on whether AFG is willing to repurchase the shares from Wickes.
AFG paid an average of $69.50 a share for the 9.8% stake.
Lear common shares made a comeback Thursday, closing at $82.875, up $2.875 for the day in trading on the New York Stock Exchange. On Wednesday, the stock tumbled $10.875 a share after the announcement that Wickes may be unable to complete the deal.
A Lear spokesman had no comment on the renewed interest of AFG Partners. He said Lear was continuing with its previously announced but publicly undefined plan to restructure the company.
A Wickes spokesman would only say that the company is continuing to seek financing for the Lear transaction. Wickes baffled Wall Street last week when it announced plans to acquire Lear just two days after it reached an agreement to take over Collins & Aikman in a $1.16-billion transaction. If completed, the two deals would bring Wickes’ debt burden to nearly $4 billion.
Meanwhile, Standard and Poor’s Corp. said it would keep Lear Siegler on its creditwatch list with negative implications. That means the big credit agency may lower Lear’s credit rating. Lear was originally placed on the list on Oct. 23.
AFG also remains on credit--watch, where it was placed--with negative implications--on Nov. 10, following its initial bid for Lear.
