The partnership led by oilman T. Boone Pickens Jr. has agreed to help provide financing for investor Paul Bilzerian's $1.06-billion takeover of Singer Co., a group headed by Bilzerian announced Wednesday.
The agreement by Pickens' Mesa Holding Limited Partnership to provide up to $150 million in junior subordinated financing for the $50-a-share buyout offer completes commitments for the financing needed to complete the deal, the Bilzerian group said.
Bilzerian also has commitments from a syndicate of banks to provide as much as $540 million in margin financing and from the investment firm Shearson Lehman Bros. to provide up to $355 million. Those commitments were conditioned on the group, which also will put up $100 million in equity, getting the $150 million in financing to be provided by Pickens.
Singer stock jumped $1.625 to close at $48.75 a share in New York Stock Exchange trading on Wednesday.
There has been widespread skepticism that Bilzerian could come up with the financing necessary to complete his tender offer for Singer, given his reputation as a speculator and the weak condition of the market for the high-yield junk bonds used to finance such takeovers.
Opposition to Be Dropped
Singer has resisted his overtures, but last month said it had failed to come up with a viable alternative bidder and its shareholders should decide for themselves whether to tender their stock.
Singer management also has agreed to drop its opposition if Bilzerian could arrange financing for his buyout.
Bilzerian's group stated in a news release that its advisers were prepared to meet and "expeditiously" sign a definitive merger agreement with Singer. Representatives of Bilzerian's group declined to elaborate on the announcement, and a Singer spokesman said the company would have no immediate comment.
All the financing is subject to execution of a merger agreement with Singer and other conditions.
Bilzerian announced Monday that, as of Dec. 30, Singer shareholders had tendered 10.2 million shares under the $50-a-share offer, which expires next Monday.
Bilzerian already holds about 2.1 million shares, and Mesa controls another 2.1 million, giving Bilzerian control over more than 68% of Singer's 21.1 million common shares outstanding.