AMC Board Discusses Chrysler Bid, Postpones Annual Meeting

American Motors’ board of directors met Friday to discuss Chrysler’s buyout proposal, but reached no decision. The board decided to postpone the annual meeting, at which shareholders would vote on the deal, an AMC spokesman said.

No date has been set for rescheduling the postponed April 29 annual meeting, AMC spokesman Jerry Sloan said.

Chrysler announced March 9 that it had agreed to buy French government-owned Renault’s 46.1% interest in AMC and has offered to swap about $4 worth of Chrysler stock for each of the other outstanding AMC shares.

AMC common stock has stood at about $4.25 a share since the deal was announced. Its price has been boosted by speculators’ hopes that Chrysler will sweeten its offer, said analyst Ronald Glantz of Montgomery Securities Inc. in San Francisco.

The AMC board, which met at an undisclosed location in New York, opted for the postponement so that it could combine the regular shareholders’ meeting with a vote on the Chrysler deal, Sloan said.

Reason for Delay

AMC last week hired Shearson Lehman Bros. in New York as a consultant on the buyout and is still gathering information and recommendations. The board of directors will continue to meet periodically until it decides whether to accept the offer as proposed.

The shareholders’ meeting was delayed to give AMC time to assemble a proxy after the board makes a decision on the Chrysler offer, Sloan said. After a review by the Securities and Exchange Commission, it would go to shareholders for a vote, Sloan said.

Sloan said he was unable to disclose how far AMC has progressed in its examination of the proposal. The board apparently won’t be ready to make a decision for about a month.

But AMC’s decision will make little difference either way, Glantz said.

“Politically, getting out of American Motors is popular for Renault. It’s conceivable that Chrysler would get only (Renault’s shares), but that’s enough,” he said.

“That gives Chrysler control of the company and gives Chrysler access to Jeep and access to AMC dealers, and that’s what Chrysler wants.”

‘Not Unusual’

In addition to Renault’s 46.1% of AMC’s voting stock, Renault has non-voting convertible stock and warrants to buy stock which, if converted into voting stock, could give Renault as much as 66.46% of AMC, said AMC spokesman Ed Snyder.

AMC’s lack of an immediate response either way to the Chrysler offer is not unusual, Glantz said.

“This is the normal game that a company plays,” he said.