Bid Made for Giddings & Lewis
Harnischfeger Industries Inc. said Friday that it offered to buy Giddings & Lewis Inc., a Fond du Lac, Wis.-based maker of industrial automation products and machine tools, for about $747 million, including assumption of debt.
It said the $19-per-share offer has a value of about $747 million, based on the approximately 33.2 million shares of Giddings & Lewis stock now outstanding and including the assumption of Giddings & Lewis debt.
The price represents a premium of about 40% over Friday’s closing price on Giddings & Lewis’ stock of $13.625 per share.
Harnischfeger Chief Executive Jeffery Glade said the company would have to take on significant debt to finance the deal, but added that financing is in place.
“It’s fully financed, no contingencies,” Glade said in an interview.
He added that he expected the deal would add to Harnischfeger earnings immediately upon closing and that with growth, the debt would be paid down quickly.
The transaction would create an enterprise with combined 1996 revenue of $3.6 billion with operations in mining equipment, pulp and papermaking machinery, and industrial products and services.
Glade said that Milwaukee-based Harnischfeger would use Giddings & Lewis to help improve its aftermarket service to the machine tool and material handling business.
“We’ll be within 24 hours of any major plant in the United States,” Glade said. “That’s what happens if you put our business with ours.”
Harnischfeger is not looking to cut plants or lay off employees if it succeeds in its offer, Glade said.
“What we intend to do is grow this little baby,” Glade said. “We think we can sell more and become a better service provider.”
Harnischfeger said it made its offer in a letter dated Friday from Glade to Giddings & Lewis President and Chief Executive Marvin Isles.
Harnischfeger had been talking to Giddings & Lewis about an acquisition since Monday, then made the offer Friday after receiving what it considered a rejection from Giddings & Lewis’ board, Glade said.
Giddings & Lewis would not comment on its discussions with Harnischfeger.
In a news release late Friday, the company urged shareholders not to act on the Harnischfeger offer until its board of directors reviewed the deal and the company’s alternatives.
Harnischfeger is an international holding company with businesses involved in the manufacture and distribution of equipment for underground mining, surface mining, pulp and papermaking and material handling.
Glade said Harnischfeger had alternatives to Giddings & Lewis, but that Giddings & Lewis is the best choice. He would not say at what price Giddings & Lewis remains the best alternative. Harnischfeger shares closed down $1 at $45.375 on Friday.
