NEW YORK — ITT Corp. said Friday that it had discussions with Sperry Corp. about a possible merger but that the talks were canceled.
ITT's statement came after shares of both companies were heavily traded on the New York Stock Exchange amid market rumors that a merger of ITT and Sperry was in the offing.
ITT said that "for some time" it had been talking to Sperry, a leading maker of computers, about possible transfers of technology and product marketing.
Those talks "developed into preliminary discussions of a possible merger or an acquisition of Sperry by ITT," but those talks were terminated, ITT said.
"No negotiations leading to the acquisition or merger with Sperry Corp. are currently taking place," although discussions about the technology and marketing transfers are continuing, the company added.
Asked why the merger talks fell through, ITT spokesman Bryce Miller said only that "they couldn't agree to terms," and he declined to say what terms had been proposed. He also said the discussions were ended earlier this week.
There was no answer at the offices of Sperry following ITT's announcement, which came after the close of business hours. Earlier, however, Sperry spokesman J. Peter Hynes had declined any comment on the rumors.
Stock Price Up
Before ITT's statement, Sperry's common stock climbed $1.25 a share to $53 in NYSE composite trading. The stock had surged $4.375 over the four previous sessions amid earlier takeover speculation involving Sperry.
Sperry's book value is $52.75 a share, said John J. McManus, who follows the company for the investment firm Bear, Stearns & Co. Total book value, with about 55.4 million common shares outstanding, is $2.92 billion.
Also on the Big Board, ITT's common stock edged up 12.5 cents a share to $30.125 in trading that totaled 1.47 million shares. The stock, which rose 37.5 cents in the previous session, remains well below its 52-week high of $42.25.
ITT's common stock closed at $32.75 a week ago. The company has about 139.7 million common shares outstanding.
ITT, whose revenue is more than double Sperry's, is one of the nation's biggest industrial companies and a widely diversified concern. But it is now concentrating on telecommunications and other high-technology ventures and is trying to divest most businesses not included in that strategy.
In the first nine months of calendar 1984, ITT's profit was $273.2 million on revenue of $9.17 billion.
Sperry is a leading maker of large-scale computer systems, flight and navigation control systems, especially for defense, and farm equipment. Sperry is the nation's sixth-largest computer maker based on data-processing revenue, according to the trade publication Datamation.
In its fiscal year ended March 31, 1984, Sperry earned $216.2 million on revenue of $4.91 billion.
The merger rumors had raised speculation that ITT might be looking to make a major purchase in order to curb the threat of a takeover of ITT, a possibility that repeatedly has been raised in the past.
Among the recurrent rumors is that Minneapolis investor Irwin L. Jacobs might make a bid for ITT, which has suffered in recent years from sluggish earnings and a heavy debt load of about $4 billion.
Jacobs has said that he owns "a substantial" stake in ITT, although less than the 5% that would require a filing with the Securities and Exchange Commission.
In an interview before ITT's announcement, Jacobs said: "If a deal is announced and it is not in the interest of (ITT) shareholders, I will not sit back passively. I will do anything necessary to protect my investment."