Takeover Bid for Standard Brands Fails : But Paint Retailer Leaves Door Ajar
Standard Brands Paint, a leading do-it-yourself home decorating chain, Monday rejected an unsolicited $28-a-share bid from a New Zealand real estate and investment firm but left the door open for other offers.
In a statement, Stuart D. Buchalter, Standard Brands Paint chairman, said the $300-million offer from Chase Corp. of New Zealand was “inconsistent with the maximization of shareholder value.” Standard Brands Paint said its directors were exploring several alternatives, including a friendly merger with another firm or a management buyout.
Joseph R. Glew, a Chase Corp. director, wasn’t surprised by Standard Brands Paint’s rejection. “It hasn’t dampened our desire to take control of the company,” he said.
Glew said Chase Corp. was also reviewing its options, including a hostile tender offer for Standard Brands Paint shares. Chase Corp. made its offer through its U.S. affiliate, Entregrowth International, which owns 4.8% of Standard Brands Paint’s shares.
Standard Brands Paint stock rose $1.50 a share to $30.50 in composite trading on the New York Stock Exchange, indicating that investors may expect a higher bid to emerge.
Standard Brands Paint, based in Torrance, operates 133 stores in the West and is the leading paint retailer in Southern California. Despite its strength in the marketplace, the company’s performance has suffered due to competition from such discount retailers as Home Depot and Home Club. Last year, it earned $15 million on sales of $326.6 million.
Standard Brands Paint owns nearly 90% of its stores, and that large portfolio of undervalued real estate is what attracted the attention of Chase Corp., a leading real estate developer in New Zealand.
Craig Walker, a spokesman for Standard Brands Paint, said the company’s directors would decide among alternatives “within two weeks.”