Beazer Raises Its Bid for Koppers to $1.7 Billion
Beazer PLC, unable to lure Koppers Co. into a friendly deal, on Friday boosted its hostile tender offer for the building materials and cement company to $1.7 billion.
Government officials, meanwhile, lashed out at Shearson Lehman Hutton for assuming the unusual role of equity partner in the takeover bid, but Shearson maintains that it is merely acting as a responsible investment banker to Beazer, a long-standing client.
To protest Shearson’s collaboration in the battle for Pittsburgh-based Koppers, Pennsylvania officials said they have terminated a $7-billion-a-year relationship with the New York investment house, and one lawmaker has called for a congressional investigation into Shearson’s role.
Koppers has rebuffed Beazer ever since it appeared on the scene three weeks ago with a $45-a-share offer. Last weekend, Beazer sweetened that bid to $56 a share, or $1.52 billion, which Koppers characterized as inadequate.
Before going directly to shareholders with its latest $60-a-share tender offer, the British construction and building materials company tried to negotiate a friendly deal at the same price with Koppers management.
In staunchly resisting the overtures, Koppers said it is prepared to go deep into debt to finance a one-time cash payout to its shareholders as a defensive maneuver. A consortium of banks has agreed to lend Koppers about $1 billion to finance the payout.
Beazer has threatened to sue Koppers if the company sells some or all of its construction materials and services business as part of a recapitalization plan.
Stock Price Dips
Separately, Koppers asked the U.S. District Court in Los Angeles to halt Beazer’s tender offer because of antitrust considerations. Beazer had agreed to sell Koppers’ aggregate plant in Los Angeles if the deal is consummated to satisfy the Justice Department’s antitrust concerns. Beazer called the Koppers move “completely without merit.”
Koppers stock fell 12.5 cents to $58.625 a share on the New York Stock Exchange.
At Koppers annual community business luncheon in Pittsburgh, President Glen Tenley, a 33-year Koppers veteran, declared management’s intention to remain independent.
“Thirty-three years have not been spent with Koppers to be put under some other company’s ownership just because the dollar is cheap and there are fat financial fees to be made,” he said.
In a full-page advertisement appearing in Friday’s editions of the New York Times, the treasurer of Pennsylvania criticized Shearson and its parent, American Express Co., for their role in a hostile bid that “can potentially have a significant adverse impact on jobs in this state.”
Treasurer G. Davis Greene Jr. said in a letter to Shearson American Express Chairman and Chief Executive Peter A. Cohen that he suspended all business activity between the state Treasury’s office and Shearson on Wednesday.
Greene said that “business activity” totaled $7 billion over the past year.
