JACOR Chief Defends Firm’s Bid for Maxwell Laboratories

JAYCOR President James Young on Monday described the privately held defense contractor’s unsuccessful $17-a-share bid for Maxwell Laboratories as “particularly attractive.”

Young, in a prepared release issued Monday, said that JAYCOR had “firm commitment from major financial institutions” for financing needed to complete the proposed $44.2-million deal. Young also complained that Maxwell’s board has rejected JAYCOR’s request to at least open negotiations between the two companies.

Maxwell’s board of directors on Thursday rejected the uninvited bid, describing it as an “unsatisfactory” and “highly conditional” bid that did not benefit the company’s shareholders. Maxwell Vice President Sean Maloy on Friday said the offer conflicted with Maxwell’s growth strategy. Maxwell is a high-technology company that manufactures products for defense and commercial customers.

Industry analysts on Friday suggested that JAYCOR’s unsuccessful bid would open the door for more bids by JAYCOR or other companies. But JAYCOR Vice President Vernon Blackman on Monday declined to comment on whether JAYCOR would make a higher bid for Maxwell.

However, Blackman said that JAYCOR “is only interested in a friendly merger. . . . We are not interested in a hostile tender offer for Maxwell. We have the highest regard for Maxwell management and its key personnel.”

Young “did not understand how Maxwell’s board could have found the terms and conditions of Maxwell’s all-cash merger offer ‘unsatisfactory’ . . . (or) ‘highly conditional’ when the opposite was true,” according to the release.

JAYCOR is pressing Maxwell’s board to open negotiations between the two San Diego-based companies, Blackman said. “We obviously (think) that conditions would be altered if face-to-face meetings with Maxwell were to occur,” Blackman said. “We think there’s a lot to be gained by merging these two companies . . . and we hope conditions would change if the Maxwell board and ourselves could start a dialogue.”

Blackman on Monday defended JAYCOR’s $17-a-share bid. “We’ve done an extensive financial analysis of Maxwell, and Maxwell plus JAYCOR, and we feel that $17 is a reasonable price,” Blackman said.

Maxwell closed up $.75 on Monday, at $16.75.