NEW YORK — An investor group attempting to gain control of Allegis Corp. will continue its bid despite an anti-takeover plan proposed by the board of the travel conglomerate, the group stated Monday.
The group led by New York-based Coniston Partners already controls 7.7 million Allegis common shares, or about 13% of the common shares outstanding.
The group indicated last week that it was attempting to solicit shareholder consents to win control of the board of directors, and if successful would sell all or part of the company.
Following disclosure of the takeover bid, Allegis said it planned to borrow $3 billion, more than doubling its outstanding debt, in order to pay shareholders a special $60-a-share cash dividend to thwart the takeover.
"The group intends to review the advisability of the company's proposed recapitalization plan as further details concerning the plan are announced," Coniston stated.
"The group intends to consider the same or a similar plan as a first step in its previously announced plan for a more complete restructuring of the company."
Coniston stated that it planned to sell "or otherwise dispose of" Allegis assets to pay down debt, to make possible further distributions to shareholders and to strengthen the company's business and financial standing.
In initially announcing the takeover proposal, Coniston said it planned to sell all or some of Allegis' major assets, which include United Airlines, Hertz auto rental, and the Westin and Hilton International hotel chains. Coniston has stated that it believed Allegis would be worth more if split into separate companies.