Benequity Agrees to Back Renouf’s Sweetened Offer
A short but stinging fight for control of Benequity Holdings, a real estate limited partnership in Los Angeles that owns more than $168 million in properties, has been settled with the company’s top officers agreeing to sell their interest as part of a sweetened tender offer, both sides announced Monday.
Renouf Corp. International, a Dover, Del., firm, agreed to increase its bid to $31 per unit for all the outstanding partnership units of Benequity by Feb. 20 or to drop its offer for the company.
Renouf, which controls about 25% of Benequity, currently is offering $28 per unit for 1.5 million Benequity units or $30 per unit if the general partners agree to resign.
Benequity has about 5.8 million units outstanding, making the proposed tender offer worth nearly $180 million, said Renouf Executive Vice President Ray Hulett-Needham.
Benequity Holdings was formed as part of the 1985 dissolution of Beneficial Standard Corp., a Los Angeles insurance company founded in 1940 by the late Edward D. Mitchell and his partners.
The company sold the heart of its insurance business the year before to CalFed. Shareholder lawsuits resulting from the liquidation caused Benequity’s auditors to qualify the company’s 1985 financial statements.
Under Monday’s agreement, Benequity’s managing general partner will recommend acceptance of the amended offer if it is made, the companies said in a joint announcement. Chairman Joseph N. Mitchell and President Jonathan E. Mitchell agreed to tender their units, about 12% of Benequity.
Although the proposed sweetened tender offer is conditioned on, among other things, Renouf completing a review of Benequity’s operations by March 2, “this is a deal we want to do, we fully intend to do,” Hulett-Needham said.
If it drops its offer, Renouf agreed not to buy any Benequity units for five years. Renouf, a U.S. partnership between the investment firms of Renouf Corp. Australia and Renouf Corp. Limited of New Zealand, already has spent nearly $18 million for 607,750 units of Benequity. It has an option to buy another 841,800 units.
