KaiserTech Chairman Selling Stake : Texas Financier Agrees to Acquire 32.1% Voting Share
Beleaguered KaiserTech Chairman Alan E. Clore has agreed to sell his stake in the Oakland-based aluminum company to a firm controlled by Texas financier Charles E. Hurwitz, it was announced Monday.
Hurwitz, a low-profile Houston deal maker known for his takeovers, also owns a lumber company that has been criticized recently for chopping down too many old redwoods in Northern California.
Hurwitz’s Maxxam Group, a New York-based real estate and forest products company, will pay between $229.6 million and $233.7 million for a 32.1% voting stake in KaiserTech. That includes stock Clore was forced to sell after the October market crash put the British investor in default on loans secured by the shares.
The block of KaiserTech shares also includes stock bought for Clore by other entities, including the Jefferies & Co. securities firm.
However, it was not immediately clear what will happen to the eight board seats controlled by Clore, who bought his interest in Kaiser Aluminum & Chemical after a two-year takeover fight. Under an agreement ending the battle last year, Clore agreed to pump $140 million into the company and he was named chairman of KaiserTech, a newly formed parent of Kaiser Aluminum.
“I’m not sure (what will happen) and the agreement was with Mr. Clore,” not with Maxxam, a KaiserTech spokesman said. Company officials had been discussing some sort of “broad public distribution” of the stock with Clore, he said.
A Maxxam spokesman said representation on the board still must be discussed with KaiserTech, assuming the Clore directors resign after the stock is sold. KaiserTech’s board has six other directors.
Hurwitz’s string of takeovers began in 1978 when he acquired McCulloch Oil of Los Angeles, since renamed MCO Holdings. In 1982, Hurwitz bought controlling interest in Simplicity Pattern, then sold the pattern business and rechristened the company Maxxam Group. Maxxam bought San Francisco-based Pacific Lumber in late 1985 after a brief struggle with management.
Maxxam’s operation of Pacific Lumber, one of the world’s largest producers of redwood lumber, has outraged environmentalists in Northern California. Pacific Lumber used to be known for its conservative harvesting techniques but environmentalists charge the company has doubled its cutting of old-growth redwoods, trees between 200 and 2,000 years old.
“Basically the company is very successful in meeting its business plan . . . and is in compliance with the California Forest Practices Act,” which provides a comprehensive system for regulating the logging industry, the Maxxam spokesman said.
Maxxam Group is buying the stock because “as far as he’s concerned, it’s a heck of a deal at these prices . . . given the assets of KaiserTech,” the spokesman said.
Maxxam has agreed to pay $12 a share for 6.2 million shares of Clore’s KaiserTech common stock and is negotiating to buy another 2.8 million shares owned by other entities. In addition, Maxxam has acquired an option to buy 8.2 million shares of preferred stock at a price from $13.75 to $14 a share, plus expenses of $8 million to $10 million.
KaiserTech closed at $11.875 on the New York Stock Exchange, up $1.125.
The common shares represent a 16.8% voting stake in KaiserTech and the preferred shares represent another 15.3% voting stake.
