Rockwell Secures Credit for Buyout of Balking Reliance

Rockwell International Corp. said Thursday it has lined up $2.5 billion in new credit, removing the last barrier to its proposed buyout of Reliance Electric Co.--except for Reliance’s refusal to sell.

Rockwell said it has arranged two revolving credit lines with a group of 27 banks led by Morgan Guaranty Trust Co.: one for $1.5 billion, with a term of five years, and one for $1 billion, with a term of 364 days.

Seal Beach-based Rockwell last month offered $30 a share in cash to Reliance stockholders, valuing the Cleveland company at $1.5 billion.

Reliance had already agreed to a $1.4-billion takeover by General Signal Corp. in which Reliance shareholders would receive shares in General Signal.

Reliance remained standoffish Thursday about the Rockwell offer, issuing a statement saying that the offer contains too many uncertainties for Reliance’s directors to recommend it.

Spokesman Stephen A. Van Oss said the board is concerned about a $50-million fee it might have to pay to General Signal for canceling that deal, combined with the number of conditions under which Rockwell would be able to call off its proposed takeover.

“It’s possible that we would have to pay the $50 million to General Signal and wind up with no deal because Rockwell walked away,” Van Oss said.

Rockwell, which announced last week that federal antitrust regulators were satisfied with its proposal, said it would extend its offer past the current expiration date of Nov. 18 if necessary.

Rockwell, a conglomerate best known for defense and aerospace products such as the B-1 bomber and the space shuttle, makes parts for automated assembly lines through its Allen-Bradley operations. It is interested in merging those with Reliance’s complementary line of industrial automation products.