Investor Bids for 90% of Borden to Derail KKR Offer
Investor Paul B. Kazarian on Wednesday outlined a plan to buy up to 90% of Borden Inc.’s stock for as much as $2.28 billion in a bid to derail an offer by Kohlberg Kravis Roberts & Co.
Kazarian’s investment firm, Japonica Partners, said in a letter to Borden Chairman Frank J. Tasco that it is interested in producing a “significant transaction with Borden or its shareholders” to provide greater value than would have been available under the KKR offer.
The Kazarian proposal, which calls for paying $16 to $18 a share for Borden stock, comes to $2.28 billion if the higher price were to be used to buy 90% of the well-known food company’s 141 million shares outstanding.
KKR has offered $14.25 a share, or $2 billion, for Borden in the form of part of its stake in food and tobacco conglomerate RJR Nabisco Holdings.
“As we have said repeatedly from the outset, we wish to act as a proactive white knight; and the board’s determination to sell Borden mandates that the board accept us in that role,” said the letter, received by the Associated Press late Wednesday evening.
A telephone call to Borden’s New York headquarters seeking comment late Wednesday met with only a recorded message.
Kazarian’s proposal, according to sources close to the negotiations who spoke only on condition of anonymity, offers various transaction possibilities, including an equity infusion of $200 million to $500 million for a corresponding stake in Borden.
Possibilities offered by Kazarian to pay for the stock included cash and the stock of an unnamed company listed on the New York Stock Exchange, the sources said.
Japonica’s letter was sent after Kazarian met with Borden managers for about three hours Wednesday night.
The sources said a clause in a Borden agreement with KKR precluded Borden executives from discussing specifics of Kazarian’s or anyone else’s proposals short of an actual buyout offer.
Borden shares closed Wednesday unchanged at $14 a share on the New York Stock Exchange.
Japonica’s proposal came after the offer by KKR had already met with reported resistance from shareholders.
