Kaiser Cement has agreed to be acquired by Hanson Industries, the U.S. subsidiary of British-based Hanson Trust PLC, for $27.50 a share, or about $200 million.
The agreement apparently safeguards Kaiser's current management from Los Angeles financier David H. Murdock, who in September increased to 22.1% his holdings in the company.
Kaiser's approval of the deal was in part conditioned on the new owners retaining the Kaiser executive team, led by Chairman and Chief Executive Walter E. Ousterman Jr.
"Hanson is known to allow its companies a great deal of autonomy," said David Hunn, director of investor relations at Kaiser Cement. In the United States, Hanson owns Ames Tools, Smith-Corona Typewriters, USI Lighting and Hygrade Food Products, among others. Its British parent's stable includes a department store chain, Imperial Tobacco and Ever Ready Batteries.
Oakland-based Kaiser, the nation's fifth-largest cement producer, began looking for a buyer or possible "white knight" when Murdock's increased stock purchases raised fears that he would try to wrest control of the company from its current managers. Negotiations with Hanson began "in earnest" only last week, Hunn said.
Hanson is expected to commence its tender offer for Kaiser shares early next week. The deal is conditioned on Hanson obtaining at least 51% of the 7.3 million shares outstanding. The price offered for the company represents a substantial premium.
Stock Price Jumps
Word of the acquisition, which was agreed to late Wednesday evening, drove Kaiser Cement's stock up in sluggish post-holiday trading on Friday. It closed up $7 a share to $27.375--a 52-week high--on the New York Stock Exchange.
In another cement industry development, Lone Star Industries said it was selling a 60% interest in its Southeastern operations to Tarmac PLC, another British company, for $225 million. That news also spurred stock in Lone Star, another major cement maker, to a new high. It closed up $4.375 a share to $36.25.
Kaiser's stock has been trading in the $20 range for the past couple of months. But Kaiser Cement shares had been languishing in the $14 range before Murdock's announcement in late September that he had purchased an additional 944,200 shares at $17 apiece.
Murdock, chairman of Castle & Cooke in Los Angeles and of Flexi-Van in New York, first became a significant owner of Kaiser Cement stock in August, 1984, when he gained control, directly and indirectly, of 6.8% of the stock.
Until Murdock's most recent purchases, Hong Kong businessman Li Ka-Shing had been the biggest single shareholder. Li, who had been a Kaiser Cement partner in its ill-fated China Cement venture, has maintained a steady stake in the company, saying that his interest was for investment purposes only.
Neither Murdock nor officials of his wholly owned Pacific Holding Co. were available for comment.
Hanson's deal is conditioned on it receiving at least 51% of the outstanding shares. However, in the event that Murdock or any other bidder mounts successful opposition to Hanson's purchase, a condition of the deal with Kaiser Cement apparently would give Hanson a handsome profit.
Kaiser has granted Hanson options to purchase, for $20.375 a share, new issues of common stock that would give it as much as 18.5% of the company.
If it fully exercised its option, Hanson would own as many shares as Murdock does now. Hanson could then tender those shares to the bidder, presumably at a premium.
Kaiser, which has about 1,000 employees worldwide, operates cement plants in Northern and Southern California, Montana and Texas and has a 43% stake in an Indonesia cement facility.
Its plants are still operating despite ongoing contract disputes with its unionized employees.
Kaiser Cement was a part of the industrial empire founded by Henry J. Kaiser and became a separate company when Kaiser Industries was liquidated in 1971. Ousterman, who joined Kaiser Cement in 1957, has been its president since 1976 and chairman since 1979.
The Kaiser Cement announcement was the third major change at a former Kaiser Industries company this week. Control of neighbor Kaiser Aluminum & Chemical, which also has its headquarters in Kaiser Center in Oakland, will shift to a group led by British investor Alan Clore.
In that deal, an apparent outgrowth of the aluminum company's yearlong struggle against a takeover by a J. A. Frates-Clore group, incumbent management will remain at the company.
But Kaiser Steel, which was acquired in 1984 in yet another J. A. Frates takeover, this week saw the ouster of current Chairman and Chief Executive Monty Rial.
Rial, who bought out his partner Frates, offered to step aside to keep disgruntled investors from making wholesale management changes at the Fontana-based company.
In its separate announcement, Lone Star said Tarmac had been given an option on the remaining 40% of the Southeastern operations, which operate cement, aggregates and concrete business in Virginia, North Carolina and South Carolina.
"We are in a dramatically changing industry, an industry that's very different from what it's been for many years. In such an environment, we cannot afford to stand still," said James E. Stewart, Lone Star's chief executive.
Lone Star is based in Greenwich, Conn. Tarmac, which has made other acquisitions in Florida, Texas and California, said Friday's agreement was part of its plans to expand in the Southeast region.