Gencorp Bid : Hubbard Had Been Secretly Buying Stock

Just two weeks after secretly launching his latest billion-dollar takeover deal, R. D. Hubbard talked about his business operations over a couple of tall Perriers and one very crumbly chocolate cookie.

It was Feb. 26 and Hubbard said he was again looking for acquisition targets to complement the speciality and residential glass operations of AFG Industries, the company he had taken from bankruptcy to more than $400 million in sales in less than 10 years.

He said he was still disappointed at losing Lear Siegler Inc. after a protracted bid in the fall.

The $18-million stock profit the company earned from the unsuccessful effort, he acknowledged, had made the disappointment a little easier to bear, but Hubbard claimed that AFG needed additional manufacturing operations to bolster its earnings potential.

Brushing cookie crumbs off his pink shirt, the lanky and dapper Hubbard volunteered that just 10 days earlier, he had lost what he thought was a sure deal to acquire Southdown Inc. of Houston, a cement maker with sizable oil and natural gas interests.

Still, he said, he was convinced that “sooner or later” AFG would find “another line of business.”

“I don’t have any targets in mind right now,” he added. “But we’re looking. . . . Investment bankers are bringing us deals every day. It’ll drive you nuts if you let it.”

That was what Hubbard volunteered Feb. 26.

What he didn’t say was that 15 days earlier, he and partners Cyril Wagner and Jack Brown, two oil and gas men from Midland, Tex., had started buying shares of GenCorp, the conglomerate they are now trying to buy for $2.2 billion.

Even as he sat there, the partnership owned 696,000 shares, or about 3% of the company.