TULSA, Okla. — New York investor Asher B. Edelman reduced his tender offer for Telex Corp. to $55 a share from $65 on Wednesday, setting a Dec. 23 deadline for shareholders to respond to his amended takeover plan.
The $10 reduction, a result of the plunge in stock prices last month, could lead to new lawsuits in the 7-week-old hostile takeover battle between Edelman's TLX Acquisition Corp. and the Tulsa-based computer products company.
Both sides said settlement talks failed during the weekend.
Stephen Jatras, Telex chairman and chief executive, said Wednesday that the company's board will study the offer. He asked shareholders to defer their decision until the board has finished its evaluation.
The board expects to complete its review and contact Telex shareholders by Dec. 9, Jatras said in a statement read by company spokeswoman Julie Gentz.
Jatras said the company is continuing to prepare proxy materials regarding its own recapitalization plan. He said the preliminary proxy materials will be filed with the Securities and Exchange Commission within the next few weeks.
Seeks Fewer Shares
Telex makes computer and electronic communications equipment and audio devices. The company employs more than 8,000 people worldwide and reported annual sales of about $840.7 million last year.
TLX Acquisition is offering to buy 10,528,000 common shares of Telex under the plan announced Wednesday. The original offer was for all of Telex's 14.7 million outstanding shares.
Combined with 624,000 shares to be contributed to TLX Acquisition by Edelman's two San Antonio computer companies--Datapoint Corp. and Interlogic Trace Inc.--and a group of unidentified investors, the amended offer represents about 75% of Telex's outstanding shares.
Edelman reportedly held 1.14 million Telex shares when the tender offer was announced Oct. 8.
At the close of business Tuesday, Edelman said 10,910,300 shares had been tendered under the original offer. Those shareholders have until Dec. 23 to withdraw their tender under the amended offer. At midnight Friday, Edelman said 11,382,941 shares had been tendered under the offer.
The offer described by Edelman on Wednesday will expire on Dec. 23 if it is not extended. It previously was scheduled to expire Wednesday, the second extension since its original expiration date of Nov. 6.
Courts May Decide
Telex stock fell 87.5 cents a share to close at $48.125 in New York Stock Exchange on Wednesday.
On Monday, Edelman said his group and representatives of financial institutions were discussing changing the offer, including lowering its value in the wake of massive stock market declines.
The change in price could be considered a new offer, rather than an extension of the original tender offer, but that is an issue likely to be decided in the federal courts, investment analysts said.
Telex management has installed a "poison pill" shareholder plan designed to go into effect in the event of a hostile attempt to acquire 15% or more of the company's common stock, other than through an offer of at least the value represented by TLX Acquisition's original $65-a-share bid.
The plan would allow shareholders the right to purchase one share of company stock for each common share held as of Oct. 30 for $2, making a hostile takeover prohibitively expensive.