Intergroup Stock Soars as Suitor Emerges

Shares of National Intergroup Inc., a diverse conglomerate that owns half of National Steel Corp., rose sharply Monday after an investment group announced that it had acquired a 7.4% stake and might take it over.

The Pittsburgh-based company, which fought off a takeover attempt by Leucadia National Corp. in 1985, would say only that it knew that Walker Street Associates LP notified the government of stock purchases made between Sept. 23 and Nov. 17 at $13.50 to $16.63 a share.

National Intergroup shares Monday rose 87.5 cents on the New York Stock Exchange to close at $18, but securities analysts said National Integroup shares could be worth $25 to $35.

They said the company could be a prime target for a breakup because its businesses could easily be sold to separate buyers.

Mark Felder of Legg Mason Wood Walker valued the company’s aluminum business at $150 million to $175 million, its National Steel stake at $300 million to $400 million and Foxmeyer, a drug unit, at $400 million to $500 million.

Poor Track Record

In its filing with the Securities and Exchange Commission, Walker Street said it might seek control, a merger or attempt to work with management.

Its 7.4% stake equals 1.6 million shares. A National Intergroup spokesman said that about 60% of the company’s 21.7 million shares are held by institutions.

The firm has made money in only two of the past seven years.

Its poor track record in diversification has depressed the price of National Intergroup’s stock, leading to the current attack, analysts said.

The Walker Street partnership is headed by general partner Steven Mizel, an unfamiliar name in corporate takeovers, one analyst said. Mizel also heads Kaufmann Alsberg & Co., a registered broker/dealer, which is a limited partner in Walker Street, the analyst said.