Bell & Howell Co. said Wednesday that it received a $602-million leveraged buyout offer from a group led by Robert M. Bass that includes the company's president, an event that could prod two other suitors into action.
Bell & Howell, a publisher and mail-processing equipment company, has also attracted takeover interest from British publisher Robert Maxwell and New York publisher Macmillan Inc. Both have acquired substantial blocks of its shares and could be tempted to enter the bidding, securities analysts said.
The Robert M. Bass Group, which is offering $64 a share, includes Bell & Howell President and Chief Executive Gerald E. Schultz but not Chairman Donald N. Frey, who will retire May 5, the company said.
Bell & Howell had no comment on the offer other than to say it would be evaluated by independent directors.
In New York Stock Exchange trading, Bell & Howell's stock rose 25 cents a share Wednesday to close at $67.75. A Wall Street arbitrager said the subdued market response probably reflected the fact that the stock was too high in the first place. "With three interested parties maybe somebody was assuming it would go for a huge price," he said. He valued the shares at between $65 and $70.
The investment group said it expected a response to its offer, which appears to already have the necessary financing, by Dec. 8.
Last Thursday, Skokie-based Bell & Howell told its investment banker, Salomon Bros., to invite proposals from potential suitors. At the same time, it revealed that it was holding talks with Bass, a Fort Worth, Tex.-based investor who already holds a 16.2% stake in the firm.
Bass inherited his estimated $1.2 billion fortune from his uncle, a Texas wildcatter who struck it rich during the Depression, formed the Bass Group in 1983 and since then has invested in everything from media to manufacturing.
The group has taken stakes in Taft Broadcasting, cable television stations and National Distillers & Chemical among others.
Many industry analysts thought as early as last week, when the Bass group signaled its intention of discussing further investments in Bell & Howell with management, that the Texas group was the favored suitor. But a higher bid from the two rivals could still materialize.
Analyst Bert Boksen of Raymond, James & Associates said that if other publishers move, it will be part of a consolidation trend in the publishing industry. "There are tremendous economies of scale due to elimination of duplicate overhead," Boksen said.
Two days ago, Macmillan disclosed that it had asked government clearance to raise its current 7.9% stake to more than 50% in Bell & Howell, which rose to prominence as a maker of home movie cameras and slide projectors.
Macmillan and Maxwell are said to have been attracted by Bell & Howell's document and mail-processing groups as well as its Merrill educational publishing unit.
A spokesman for Macmillan declined comment on the Bass announcement. Maxwell representatives in the U.S. were also unavailable to comment.
Maxwell, the British newspaper magnate who is trying to build one of the world's largest media empires, revealed two weeks ago thate he was interested in Bell & Howell. He said said at the time that he wanted to buy over 50% of the firm. Maxwell Communications has a 2.3% stake in Bell & Howell.
His Maxwell Communications group has recently embarked on a torrid buying spree, with purchases of 70% of British compact disc maker Nimbus Records Ltd. for $43 million, United Press Holdings Ltd. for $62 million and Pergamon Orbit Infoline Ltd. for $198 million.
Bell & Howell also has strong interests in career education and information storage and retrieval. About 25% of its sales come from foreign markets.
The 70-year-old company earned $32.9 million for the fiscal year, which ended Jan. 3, 1987, on revenue of $853.4 million.