Wynn's International, for months considered a prime takeover target, said Friday that it has received an unsolicited, $109-million buyout bid from a group of investors led by Security Pacific's venture capital unit.
The offer for the Fullerton-based automotive products supplier works out to $27.25 a share for Wynn's 3.8 million common shares outstanding.
News of the offer caused Wynn's stock price to soar $9.50 a share on the New York Stock Exchange, closing Friday at an all-time high of $28.875 as traders rushed to cash in on what analysts agree is likely to become an even sweeter offer.
The possibility of a higher bid is especially strong because the Security Pacific group put its offer together after learning that Wynn's management has been developing a leveraged buyout offer.
John Lillicrop, Wynn's president and chief executive, is leading the management group that wants to take the company private through a buyout, company and investment community sources said. "Security Pacific heard about it and decided to do likewise," a spokesman said.
Lillicrop could not be reached for comment Friday.
Wynn's is best known as a maker of automotive engine additives, but auto air-conditioning systems last year accounted for $190 million of its $306 million in sales. The additive business also has been strong, adding $50 million to $60 million to gross sales, according to William D. Tichy, an analyst in San Francisco with Dean Witter Reynolds.
The company also makes industrial chemicals, rubber seals for cars and industrial use and builders' hardware.
One reason Wynn's is considered a takeover candidate is its spotty earnings record, which has caused the company's stock to be undervalued for some time, Tichy said.
Net income from continuing operations has plunged 48% for the first six months to $1.5 million from $2.9 million a year earlier--partly because Mazda significantly cut its purchases of Wynn's auto air conditioning units after building its own plant, Tichy noted.
In 1986, the company earned $6.2 million on sales of $306.1 million. As of Dec. 31, the company listed its book value at $81.6 million. Wynn's long-term debt was a "manageable" $40.3 million and it had equity of $78.7 million, Tichy said.
Considering Wynn's book value and last year's sales of almost $80 per share, the Security Pacific group's offer of $27.25 per share "looks low . . . My guess is the stock has been put into play and the final chapter hasn't been written," Tichy said.
The board will study the proposal, Wynn's Chairman W. E. Bellwood said.