In a hostile takeover bid, Fullerton-based Ropak Corp. said Monday that it is offering to pay at least $16.2 million in cash for all the common and preferred stock of Buckhorn Inc., a Milford, Ohio, manufacturer of plastic containers and rubber products.
Through a wholly owned subsidiary, fast-growing Ropak, which also makes plastic containers, is offering $4 a share for the 1.8 million shares of Buckhorn's common stock and $5.75 a share for the 1.5 million shares of its preferred stock, or a total of $16.5 million, including legal and other costs.
If the directors of both companies negotiate a merger before the Dec. 22 expiration date of the offer, Ropak officials said, the Fullerton company will pay $4.25 a share for the common stock and $5.875 a share for the preferred stock, a total of $16.8 million for the shares and $400,000 in legal and other costs.
But a merger seems unlikely.
Last week, Ropak revealed plans to acquire 55% to 81% of the Ohio company. Richard P. Johnston, Buckhorn's president, called the planned purchase an "unfriendly tender offer," according to Ropak's tender offer prospectus released Monday.
Neither Johnston nor other officials at Buckhorn would comment on the actual tender offer or on previous negotiations between the two companies.
While the expiration date of the offer can be extended by Ropak, the offer is conditioned on Ropak's getting 55% of Buckhorn's total voting stock, which is composed of both the common and the preferred stock.
Buckhorn's corporate charter requires an 80% majority for a shareholder to gain control of the company.
Ropak currently owns 63,000 shares, or 3.4%, of Buckhorn's common stock and 25,100 shares, or 1.6%, of its preferred stock.
Acquisition of Buckhorn would be Ropak's biggest venture, said the company's attorney, William M. Curtis of Newport Beach. In the last two years, Ropak has spent between $7 million and $8 million to acquire six privately held plastics companies in the United States, Canada and Japan.
Because of shipping and other costs, makers of plastic containers for industrial, agricultural and commercial uses tend to be regional businesses rather than national concerns. Ropak has chosen to acquire existing companies rather than build new plants to fuel its drive to become a major national supplier of packaging products.
Curtis said Ropak's investment banker, Nagelvoort & Co. Inc. in New York, is "highly confident" about getting the necessary financing from banks, insurance companies and other lenders. The president of the Nagelvoort firm, Terry L. Nagelvoort, is a Ropak director.
Ropak initiated merger discussions Sept. 26 in a telephone call to Johnston. William H. Roper, Ropak's president, met with Johnston in Florida for two days in late October. Each side came up with proposals for a "business combination," but the proposals differed greatly, according to the prospectus.
In a Nov. 14 telephone conversation, Johnston told Roper that Buckhorn was not for sale and ended the negotiations. Three days later, Ropak publicly stated its intent to buy a controlling interest in Buckhorn.
After the takeover plans were announced, Buckhorn's common stock rose to $4 a share from $2.875 and its preferred stock rose to $5.75 a share from $5.125, Ropak said Monday. The common stock closed Monday at $3.875, down 12 1/2 cents, and the preferred stock closed unchanged at $5.75.