Kohlberg Kravis Raises Offer for Owens-Illinois

The private investment firm Kohlberg Kravis Roberts & Co. boosted its takeover offer for Owens-Illinois Inc. to $3.6 billion Monday after its previous $3.34-billion bid was rejected.

Saying it was disappointed that Owens-Illinois had rejected the first proposal without negotiations or meetings with the investment firm, KKR said it was offering $60 per share, up $5 a share from the first offer.

New York-based Kohlberg Kravis, which specializes in leveraged buyouts, initially offered $48.50 in cash and a junior security with a market value of $6.50 for each of Owens-Illinois’ 60.8 million common shares outstanding.

The second offer totals $48.50 per share in cash and a junior security with a market value of $11.50.

In rejecting the earlier bid, made Dec. 11, Owens-Illinois said it was not in the best interests of the company and its stockholders.

Owens-Illinois said rejection of the first offer was based on its belief that stockholders could earn greater long-term values through the company’s newly proposed restructuring steps.

The Owens-Illinois board said it would repurchase up to 20 million, or 33%, of its common shares outstanding and divest its forest products unit and other assets. The board also said it will recommend incentives to increase management’s equity in the company.

Owens-Illinois had no immediate comment on the higher offer.

Owens-Illinois is primarily a manufacturer of containers and other packaging goods made of glass, plastic, paper and other wood products. The company also has interests in financial services.