Micro D Chairman Favors Merger With Majority Shareholder

Micro D Chairman Linwood A. Lacy Jr. said Thursday that he favors a merger between his company and its majority shareholder, Ingram Industries, if the price is right.

Ingram, a Nashville-based conglomerate that owns nearly 60% of Micro D’s stock, offered Wednesday to pay $12.50 per share, about $37 million, to buy the rest of the Santa Ana wholesaler of personal-computer products.

“A combination of Micro D and Ingram is a very powerful combination, and it would be very beneficial to the employees of Micro D,” Lacy said.

He would not say whether he considers Ingram’s $12.50-a-share proposal to be a fair price. That issue, he said, will be decided by a special committee of Micro D’s three outside directors and investment bankers Micro D plans to hire.

One securities analyst said he expects Micro D to attract a higher offer from Ingram or someone else. “I would be surprised if they (Micro D management) didn’t look for something higher,” said E. Hunter Thompson Jr., a partner at Branch, Cabell & Co., a brokerage based in Richmond, Va.

Micro D stock closed Thursday at $12.25, up $1.75, in over-the-counter trading.

Micro D is the nation’s largest wholesale distributor of software, peripherals and accessories for personal computers.

In a required filing with the Securities and Exchange Commission, Ingram Industries said it had recently tried to interest Micro D’s management in buying Ingram’s personal computer distribution subsidiary in Buffalo, N.Y. Ingram Computer is a smaller rival of Micro D, which expects to top $525 million in sales in 1988.

“Since these discussions did not result in any meaningful negotiations concerning (a Micro D purchase of Ingram Computer), Ingram Industries has reviewed its other alternatives with respect to its investment in Micro D and has concluded that the merger proposal . . . is the best of its available alternatives,” the filing stated.

Lacey said Micro D, “had a problem with the price” that Ingram sought for its computer unit.

Ingram said in its SEC filing that if Micro D rejects its offer, it would consider four alternatives:

- Increasing Ingram’s stake in Micro D by buying stock on the open market or through privately negotiated purchases, or through a tender offer or a proxy solicitation directly to Micro D shareholders.

- Selling all or part of its Micro D holdings.

- Trying to persuade Micro D to buy Ingram Computer.

- Maintaining its current stake in Micro D.

In a letter from Ingram Industries Chairman E. Bronson Ingram to Lacy, Ingram said it intends to merge Micro D with Ingram Computer and “to continue the operations of Micro D in its present location as a separate entity.”

The letter said Ingram does not anticipate any “significant loss of jobs” for Micro D employees and intends to provide benefits “comparable or better than those presently being received.”

Ingram views “continuity of management as essential and (is) willing to negotiate with the key members of senior (Micro D) management to assure their continued commitment to Micro D,” the letter said.

Ingram, one of the nation’s largest privately held firms, owns companies that conduct marine transportation, oil and gas exploration and insurance activities. It is also a distributor of books, magazines and videotapes.