Belzbergs Seek to Buy Armstrong
Shares of Armstrong World Industries Inc. soared Wednesday after a group controlled by Canada’s Belzberg family said it would try to acquire the Lancaster, Pa.-based maker of home furnishings.
Armstrong rose $4.375 to $47.875 a share and was the most heavily traded issue on the New York Stock Exchange after the Belzberg group said it had acquired a 9.85% stake in the firm.
“We have no interest in meeting with the Belzbergs,” Armstrong Chairman William W. Adams said in a strongly worded declaration that the company is not for sale.
The incipient takeover battle quickly moved to the courts, with both companies suing to test the validity of Armstrong’s “poison pill” takeover defense, among other issues.
Armstrong, long rumored as a takeover target, may have a tough time staying independent, analysts said.
Nevertheless, some expressed skepticism about the Belzbergs’ plans, noting that the Vancouver, Canada-based investors often have not followed through with their threats.
Analysts said a successful suitor would have to pay $55 to $60 a share, or at least $2.5 billion, for Armstrong, which is known for its floor and ceiling tiles.
In a filing with the Securities and Exchange Commission, the Belzberg group said it intends to file for antitrust clearance to buy 50% or more of Armstrong stock.
The Belzberg group said that if it succeeds in a takeover, it would sell Armstrong’s furniture and industry products units.
Stock Buyback Plan
The companies that accumulated Armstrong shares are associated with Roxboro Investments (1976) Ltd. and First City Financial Corp. the Vancouver-based Belzberg flagship.
The group bought 4.6 million Armstrong common shares between May 3 and June 30 for prices ranging from $37 to $43.6645 each.
On June 20, Armstrong directors approved a plan to buy back up to 8 million of the company’s outstanding shares and six days later offered to repurchase First City’s holdings. First City declined the offer.
