Management Group Bids for J. P. Stevens
A management-led group is offering to buy J. P. Stevens & Co. for $666.5 million, the company said Monday, but the textile giant’s stock soared on speculation that higher bids would emerge.
The management group said it would pay $38 in cash plus debt securities it valued at $5 for each of Stevens’ 15.5 million outstanding common shares, the company announced.
In nationwide trading of New York Stock Exchange-listed issues, Stevens soared $12.25 to close at $45.625 a share.
The company said a special committee of its seven outside directors would study the offer, and Stevens might postpone its scheduled March 1 annual shareholders meeting as a result.
Some analysts suggested that the management group would have to sweeten its offer, and they estimated that the company was worth closer to $50 a share based on its potential cash flow.
“I think the offer is entirely unfair to stockholders,” said George O. Zimmerman, who watches the company for the securities firm Gruntal & Co.
Leading the management group is Chairman Whitney Stevens, a member of the family that founded the company in 1813.
Stevens for some time has been the object of takeover speculation, partly because of a major restructuring intended to make the company less vulnerable to stiff foreign competition in the apparel trade.
More Simplified Firm
Beginning in 1984, Stevens moved out of most apparel fabrics and shifted its manufacturing focus to so-called home fashion textiles, such as sheets, towels, carpets, curtains and draperies, under such trade names are Laura Ashley, Ralph Lauren and Pierre Cardin.
Those products make up 61% of Stevens’ current business, with the the other 39% including automotive products, yarn and industrial fabrics.
The restructuring made Stevens “a much more simplified company with a cleaner balance sheet,” said Pamela Singleton, an analyst at Merrill Lynch Research.
Takeover speculation heated up last August following reports that a group led by Arthur M. Goldberg, president and chief executive of International Controls Corp., had acquired a 4.9% stake in Stevens.
Goldberg declined to discuss the matter at the time and was unavailable to comment Monday, according to a secretary at his company’s Boca Raton, Fla., headquarters. Stevens spokesman J. R. Franklin said Monday that he would not comment either.
But last fall, Singleton noted, Stevens disclosed to the Securities and Exchange Commission that it had bought 685,000 of its own shares at a price of $48.375 per share in one transaction on Aug. 10.
Stevens said Monday that the offer by the management group was conditioned on a determination by Stevens’ board that the offer was fair, approval by a majority vote of shareholders and receipt of the necessary financing.
