Offer May Go Up if Gencorp Managers Talk, Investors Say
The investor group pursuing the $2.2-billion takeover of Gencorp said Wednesday that it is willing to consider increasing its initial $100-a-share offer for the Akron conglomerate if it can win an audience with the company’s executives.
In a rare interview late Wednesday, two representatives of the investors said that the partnership has tried repeatedly to lure Gencorp’s executives to the bargaining table but that “nothing fruitful” has come of the efforts.
The most recent request for a face-to-face meeting between the two sides was made Wednesday to Gencorp Chairman A. William Reynolds by Cyril Wagner, one of the principals of General Partners, the investor group that last week launched the takeover bid.
Joel Reed, a General Partners representative, said Reynolds declined the request, claiming that it was an inappropriate time to talk. Gencorp officials refused to discuss the conversation and have asked their shareholders not to act until the company makes a formal response to the takeover bid.
“We’re in a holding pattern now,” Reed said. “We’re not giving up.”
Meanwhile, Gencorp shares reached a new 52-week high Wednesday, jumping $3.50 to $114 per share, a move indicating that investors believe that the General Partners initial offer will be topped.
General Partners, which owns about 2.2 million Gencorp shares, or 9.8% of the company’s stock, launched its takeover attempt last week, saying it wanted the conglomerate for its General Tire and plastics-making operations.
The partnership, which includes AFG Industries of Irvine and Wagner & Brown of Midland, Tex., said it would sell Gencorp’s La Jolla aerospace operation, its Pepsi bottling operation in Georgia and its 15 radio and television properties, including KHJ-TV in Los Angeles.
Reed said Wednesday that the partnership would honor Gencorp’s previously announced plans to sell KHJ to Walt Disney Co. for $217 million and New Jersey television station WOR to MCA for $387 million.
Although General Partners has been accused of trying to extort “greenmail” from Gencorp or, at the least, of trying to score a big gain in the stock market, Reed said the claims are unfair and inaccurate.
“We sincerely want to acquire this company,” he said. “It bothers us that people question our motives. We’ve never taken greenmail.”
However, late last year, the same partners realized profits of about $37.6 million from the sale of their stake in Lear Siegler Inc., the Santa Monica conglomerate they unsuccessfully tried to buy.
