NEW YORK — One of three likely buyers circling Bell & Howell Co., the Robert Bass investor group, said Monday that it will dramatically increase its large stake in the information services and publishing concern.
In addition, the Bass group said in a filing with the Securities and Exchange Commission in Washington that it plans to discuss its investment, now adding up to 16.2% of the company, with Bell & Howell's management.
Industry analysts said the filing signaled that Bell & Howell may have cast its fate with the Bass group over two other likely suitors, Macmillan Inc. of New York and Maxwell Communications Inc. of Britain.
"I have to conclude from today's announcement that (the Bass interests) are far more than passive investors, and will obviously force something to happen here," said Bert Boksen of Raymond, James & Associates.
In the SEC filing, the Bass group, which holds 1,522,900 shares, said it intends to tell federal regulators of its plans to buy up to 25% of the company's stock. The group also said it will tell the Federal Trade Commission that, depending on market conditions, it may buy 50% or more of the company's stock.
"From what I understand, they prefer them (the Bass interests) to Maxwell," said Duff & Phelps analyst George Podrasky.
A Bell & Howell spokesman would not comment on the Bass group, except to say that its statements about discussions between the Bass group and management were accurate.
Macmillan and Maxwell Communications, both publishing concerns, have taken large stakes in Skokie, Ill.-based Bell & Howell and have expressed interest in seeking control. Analysts have said the companies are interested in several promising businesses at Bell & Howell, once known as a manufacturer of home movie cameras and slide projectors. These include its document and mail processing unit and textbook publishing.
Analysts said there was speculation that the Bass interests were working with management and that they might successfully bar other potential bidders.
Boksen said the Bass group has a variety of options. "They might work something out with existing management--some sort of LBO (leveraged buyout). They could approach the company and sell off assets they don't find attractive. . . . It's kind of clear they are going to make something happen," he said.
"It looks like they're trying to set up the Bass brothers as the white knight and we'll have to wait and see how that plays out," one trader said of Bell & Howell management.
Analysts said Bell & Howell could be worth more than $65 per share in a takeover situation. Its shares were up $3.25 at $61.75 on Monday on the New York Stock Exchange.
Analysts said there is little chance that the three suitors would agree to break the company up among themselves. "They may not be able to break it into the right pieces," analyst Podrasky said.
All three interests would be attracted to the Merrill educational publishing unit and most likely would sell the office equipment business, he said.