GAF Is First Major Firm to Exempt Itself From Delaware Law Limiting Takeovers

GAF Corp., which is considering a $1.2-billion buyout offer from a group led by Chairman Samuel J. Heyman, has exempted itself from Delaware’s new law limiting hostile corporate takeovers, the company said Tuesday.

GAF was the first major corporation to announce such a step since the controversial law was enacted earlier this month, but the action probably does not signal a widespread movement, experts said.

Many of the thousands of major companies incorporated in Delaware pushed for approval of the law and are deemed unlikely to forgo its protection.

“There’s not a rush to adopt this opt-out by the board of directors,” said Michael D. Goldman, who was chairman of the Delaware Bar Assn. committee that drew up the law.

GAF’s decision does reflect the corporate philosophy of Heyman, who won control of GAF management in 1983 after a bitter proxy fight and has pursued an acquisitive strategy since then.

The management-led group has offered to pay $40 in cash and $8.50 worth of debt securities for each of GAF’s roughly 27.7 million common shares outstanding. Heyman, who also is GAF’s chief executive, controls about 10% of the outstanding shares.

GAF stock rose 50 cents to $47.625 a share Tuesday on the New York Stock Exchange.

The chemicals and building materials manufacturer is based in Wayne, N.J., but is incorporated in Delaware, as are more than half of the Fortune 500 companies.

A key provision of the new Delaware law would bar a potential buyer from acquiring a company for three years after the buyer accumulated more than 15% of the target company’s stock. The provision would not apply if the buyer acquired a total of 85% of the company’s shares in the same transaction that it passed the 15% threshold, or if directors approved the takeover.