GAF Questions Borg-Warner Offer
GAF Corp. on Wednesday questioned the significance of investor Irwin L. Jacobs’ multibillion-dollar buyout offer for Borg-Warner, a company that GAF also has expressed an interest in acquiring.
But analysts said that although Jacobs had not made a formal bid for Borg-Warner, his announcement could move other potential suitors such as GAF into action.
In a statement released Wednesday, Wayne, N.J.-based GAF said: “As Borg-Warner’s principal shareholder, we are interested in any development which will enhance shareholder values. However, the tentative nature of the present proposal draws into question the significance of the Minstar initiative.”
Jacobs, chairman of Minneapolis-based Minstar, said late Tuesday that he had offered to purchase Borg-Warner’s 88 million common shares outstanding for between $43 and $48 a share, a total ranging from $3.7 billion to $4.2 billion.
Following the announcement, Borg-Warner’s stock climbed $1.375 a share to $39 in New York Stock Exchange composite trading on Wednesday.
GAF, a maker of specialty chemicals and building products, said two weeks ago that it owned or had options to buy a total of 9.6% of Borg-Warner and might seek a merger.
Jacobs declined Tuesday to provide details of his offer. His secretary said Wednesday that he was not in his Minneapolis office and was “not reachable.” Jacobs did not return a reporter’s telephone call Wednesday afternoon. Jacobs, who holds a 7.7% stake in the company, said he sent a letter to Borg-Warner officials but was unable to reach the chairman by phone.
Jacobs said he offered to enter into a standstill agreement--not to acquire any more shares of Borg-Warner stock--”in the spirit of showing a friendly agreement.”
Patricia Yoxall, Borg-Warner public relations manager in Chicago, said Wednesday that Jacobs’ letter was received Tuesday after the board of directors adjourned their regular meeting, and no special board meeting was planned. She declined further comment but said the company might issue another statement.
