AFG Partners Renews Bid for Lear : Offer Is Contingent on Wickes’ Deal Falling Through
The investor group that made Lear Siegler a prime acquisition target five weeks ago resurrected its original $1.5-billion offer for the Santa Monica conglomerate Monday, further complicating the already crowded and confused battle for the company.
Lear Siegler officials said the latest offer from AFG Partners, which already owns 4.7% of Lear Siegler stock, will be considered at a special meeting of the company’s board of directors today. The company would make no further comment.
The AFG offer--identical to its $85-a-share, all-cash proposal that Lear Siegler spurned last month--comes as Lear is contemplating the apparent collapse of a more lucrative and friendlier takeover deal it struck with Wickes Cos. three weeks ago.
Wickes, which had agreed to pay about $1.7 billion, or $93 a share, for Lear Siegler, later announced that it was “not optimistic” that it could finance the deal. Wickes officials said Monday that the company is continuing its efforts to arrange the necessary financing. However, the officials said the company’s chances of securing the financing have not improved since the earlier announcement.
Lear Siegler directors had originally scheduled today’s meeting to discuss their alternatives in the event that the Wickes deal falls through. The AFG Partners’ proposal is a last-minute addition to that agenda. Analysts said the renewed offer from AFG Partners increases the pressure that has been building on Lear Siegler to take definitive action regarding its future. The analysts also said that Lear Siegler must move quickly to sell assets if it hopes to placate shareholders and prevent an unwanted takeover.
“Lear Siegler’s first choice is to remain independent, and its second and third choices are to remain independent,” said Howard Rubel, an analyst with Cyrus J. Lawrence, a New York brokerage. “So they have to sell off assets. . . . But time is running out.”
Nevertheless, analysts cautioned that the Lear board is unlikely to accept any other offer or make any substantial sales of assets until Dec. 11, the date that the Wickes deal formally expires.
The deal between the two companies calls for Lear Siegler to pay Wickes $30 million if it backs out of the sale before then.
The AFG proposal, which Lear officials noted is “carefully worded,” said the investor group had renewed its buyout offer “if the presently proposed acquisition . . . by Wickes Cos. is not consummated.” The partnership also said it is prepared to discuss increasing the price if Lear Siegler can demonstrate additional value.
The partnership, which is composed of Wagner & Brown, a Texas oil and gas company, and AFG Industries, an Irvine glass maker, has said that if it acquires Lear Siegler, it would sell off its aerospace units.
