Triton Group Buys 2.5% Interest in Fuqua, Plans to Acquire More
Triton Group, a publicly traded mini-conglomerate that is 41% owned by San Diego-based Intermark, has in recent weeks acquired 521,600 shares, or 2.5%, of Fuqua Industries’ 21.6 million outstanding common shares for $14.9 million, the companies said Friday.
Triton is conducting “preliminary discussions” to acquire 1.5 million more shares held by Fuqua founder and Chairman J. B. Fuqua, according to Triton Vice President Mitchell Woodbury. There is “no assurance that an agreement will be reached,” according to a prepared statement issued Friday by J. B. Fuqua.
Triton would own slightly more than 9% of Fuqua’s stock if it acquires J. B. Fuqua’s shares, which were worth about $48.5 million at Friday’s stock market close. Triton also is considering the acquisition of added shares “through open market purchase or otherwise,” according to a Securities and Exchange Commission filing.
Partnership With Kodak
Fuqua, an Atlanta-based consumer products and services conglomerate, reported $62.9 million in net income and $772 million in revenue during 1987. It owns three small sporting-goods chains, the Snapper lawn and garden products company and Atlanta-based Georgia Federal, Georgia’s largest savings bank. In March, Fuqua became a 50% partner with Eastman Kodak in Qualex, a wholesale photo finishing company.
SEC regulations prohibit Triton from acquiring any more shares for 30 days, Woodbury said Friday. Triton would need Federal Home Loan Bank Board approval to acquire more than 10% of Fuqua’s stock because Fuqua owns a federally chartered savings bank.
However, it is “unlikely” that Triton will acquire more than 10% of Fuqua’s stock because “we don’t like highly regulated businesses such as savings banks,” Woodbury said. “It would be highly doubtful that we’d cross the 10% (barrier) as long as the bank is there.”
J. B. Fuqua does not face a mandatory retirement age but the 70-year-old executive has been considering the stock sale “because of estate planning and tax planning reasons,” spokeswoman Donna Browning said Friday. “It is a heart-wrenching decision for Mr. Fuqua because he founded this company in 1967 and has guided its growth since,” Browning said.
Fuqua, Triton and Intermark have completed two business deals in the past. In 1983, Intermark acquired Fuqua’s interest in the publicly traded Pier 1 retail chain. In 1986, Fuqua sold its interest in Triton to Intermark. And, Fuqua President Lawrence Klamon is a member of the boards of Trident Group and Pier 1, which are both publicly traded companies.
Triton, which recently sold its New York-based Simplicity Patterns subsidiary, has $300 million in cash, according to Woodbury. It recently realized a $40-million gain on the Simplicity sale and expects to report a $60-million gain on Oct. 27 when it completes the previously proposed sale of its Los Angeles-based Continental Graphics subsidiary.
Intermark and Triton are interested in acquiring Fuqua’s shares as an investment because “they have strategies that are pretty much the same as us,” Woodbury said. “However, we tend to move our companies a little faster than Fuqua.”
J. B. Fuqua “might be getting to the point where he wishes to place his block of stock in friendly hands,” Woodbury said. “We are a familiar company, and we know their businesses. If we could work out a deal with J. B., it would fit into our plans.”
However, Triton is not certain that it will pursue more stock purchases. “We’ve made no determination as to what we might do” after completing a deal with J. B., Woodbury said.
On Friday, Fuqua closed up $4.50, at $32.375. Triton closed up $.375, at $15.75, and Intermark closed up $.25 at $14.125.