Suitor Showers Teledyne With $1.67-Billion Bid for Firm

Teledyne Inc., the maker of a disparate range of products from Water Pik shower heads to unmanned aircraft, has gotten an unwanted pre-Valentine’s Day “Be mine” from longtime suitor Ronald LaBow.

In a letter to Teledyne Chairman William P. Rutledge, released Monday, LaBow offered $30 a share, or about $1.67 billion, for the Los Angeles company. Two-thirds of that would be in cash and one-third would be in stock of his own WHX Corp., the parent of steelmaker Wheeling-Pittsburgh Corp.

This is investment banker LaBow’s second run at Teledyne, which has struggled to remake itself during the downturn in the defense and aerospace industries but which has continued to be a laggard in the stock market.

In March, LaBow made an unsolicited $22-a-share offer, worth about $1.2 billion, but Teledyne rejected it and formally began searching for another possible buyer. LaBow then waged a proxy fight that culminated in his being named to Teledyne’s eight-member board last spring.

Teledyne shares rose 12.5 cents to close at $27 on the New York Stock Exchange on Monday, and WHX slipped 12.5 cents to close at $13.125. The offer was disclosed by LaBow, WHX’s chairman, after the market closed.

LaBow’s proposal sounded friendly enough, stating his intention to negotiate terms and his expectations that Teledyne board members would join the board of the combined entity and that Teledyne’s senior management would stay with Teledyne “under mutually satisfactory arrangements.” He also noted that WHX has $420 million in cash on hand.

Teledyne responded coolly, however, issuing a terse statement saying the board would consider the proposal and “respond in due course.” The company’s annual meeting is scheduled for April 24.

Teledyne was assembled in the conglomerate-happy 1960s by Henry Singleton, holder of a doctorate in electrical engineering from the Massachusetts Institute of Technology. It stumbled in recent years because of legal problems with its key customer, the U.S. government.

Starting in 1989, the company was the focus of at least eight federal criminal investigations and many civil actions. The company agreed to pay more than $150 million to resolve the civil suits, including one charging that a Teledyne division failed to properly test switches sold to the Pentagon.

Embarking on a new business plan developed by Rutledge and President Donald Rice, Teledyne markedly improved its operating performance in 1995, but its stock price continues to wallow below expectations.

One of the company’s hottest new products is a swimming pool purification system that uses ozone to drastically reduce the need for chemicals. The company also produces dental hygiene devices, swimming pool heaters, explosives and metal hip replacements.

That LaBow would make a bid came as no surprise to Michael Bunyaner, an investment analyst with Oppenheimer & Co. in New York.

“Teledyne, I believe, is still undervalued,” he said. “This is just a reflection that somebody else believes that too.” Bunyaner added that he considered the $30 bid to be “a little bit on the low side.”

As to why LaBow would make the offer now, after lying low for several months, spokeswoman Joele Frank said this was the time “to take advantage of the upside potential” the merged companies would offer.

Times staff writer James F. Peltz contributed to this report.