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Singer Wants Deal by Year-End to Stave Off Bilzerian

December 01, 1987|From Reuters

MONTVALE, N.J., — Singer Co. said Monday that it wants to be bought or merged with another company by the end of the year, an event that will keep it free from corporate raider Paul A. Bilzerian and possibly win it a better price than his $1.05-billion offer.

Last week, Singer said it was talking with a number of potential suitors, domestic and international, but that the group did not include the one investor who has made a $50-a-share bid for the company, Florida-based Bilzerian.

"We want the best price for the company," company spokesman Tom Elliott said, noting that the price of Singer shares, at $51.50, was still above Bilzerian's $50 offer, made Nov. 2. In New York Stock Exchange trading Monday, Singer closed down $1.50 at $51.50.

Elliott said last week that the company was having preliminary talks on a merger, but that it was prepared to enter into negotiations leading to a definitive agreement. It wants such an agreement within the next month.

Singer's ability to hold its own--down only $1.50--in Monday's sharply lower stock market session indicates that the defense company may very well be able to improve on Bilzerian's offer, securities analysts said.

"This tells you that the investment community believes that something outside Bilzerian's offer is happening," said Michael LaTronica of Redding Research Group. "For a takeover stock not to suffer in this environment, there's a fair degree of confidence," LaTronica said.

In its statement Monday, Singer reiterated its recommendation that shareholders not tender their shares to Bilzerian, who currently holds 9.9% of Singer.

Singer first rejected Bilzerian's offer Nov. 13 and has since repeated its recommendation that shareholders not tender to Bilzerian's group. Some analysts have said the company may be worth as much as $60 a share.

Singer had been determined to remain independent, but Bilzerian's takeover bid this month sent it looking for a "white knight." Bilzerian has said he is able to finance his offer, but Singer is against his plans to dismember the company, a possibility he mentioned just after his bid was announced.

Securities analysts have said potential buyers include General Electric, Rockwell International, Ford, Boeing and Chrysler. None of the companies mentioned has commented on the speculation.

Friendly foreign suitors may include British electronics maker Plessey Co. and Thomson-CSF, the French firm that agreed in July to acquire the consumer electronics business of General Electric Co.

Part of Singer's effort to remain independent was a $775-million restructuring plan announced last month, which included a $45-a-share cash payment to shareholders. Analyst Michael Lauer of Oppenheimer said Singer was unlikely to restructure further to ward off Bilzerian.

"I think they have pretty much restructured as much as they can," said LaTronica. He said Singer was under pressure to appease shareholders, who have filed suits against the firm claiming its management did not act in their best interests by rejecting Bilzerian's offer.

"I don't think Singer has a chance of remaining independent," LaTronica said. "It's looking at a white knight and should reach a decision before the end of the year."

Its active seeking of a suitor suggests that it is determined to steer clear of Bilzerian, who has had an unsuccessful record in corporate takeovers. This summer, he failed in efforts to acquire retailer Pay 'N Pak and has also been involved in unsuccessful bids for Peabody & Co., Hammermill Paper Co. and Allied Stores Corp.

Rumors that Singer was a target for takeover circulated in the market in recent months. But it was believed able to ward off unwanted suitors until its former Chairman Joseph B. Flavin died in October. Over a 12-year period, Flavin restructured the company from a sewing machine maker into a successful defense contractor and had been intent on keeping it independent.

The firm said it expects representatives of potential buyers to start visiting its facilities this week.

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