Black & Decker Ups Ante for American

Takeover target American Standard Inc. sweetened a defensive recapitalization plan to $2.3 billion Friday, but hostile pursuer Black & Decker Corp. countered by raising its offer to $2.2 billion in a battle to woo shareholders of the plumbing and air-conditioning giant.

Wall Street analysts who monitor the companies said both had the financial muscle to push the price higher but that Black & Decker appeared to have the advantage in the struggle, partly because its offer is all-cash.

I think it’s unlikely American Standard can beat this offer,” said James Wei, who follows the companies for the investment firm of Tucker, Anthony & R. L. Day.

American Standard last month proposed a massive recapitalization, in which it would restructure levels of debt and equity to pay shareholders an amount it contended was more valuable than the price Black & Decker offered.

A recapitalization is often used to thwart unwelcome takeovers because the strategy plunges a company into debt, making it less attractive as an acquisition. Under American Standard’s sweetened recapitalization offer, it would pay shareholders $64 in cash, $5 in securities and one share of stock in the recapitalized company for each old share. The earlier cash portion was $59.