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Emhart Offers $580 Million in Hostile Bid for Stanadyne

January 11, 1988|Associated Press

FARMINGTON, Conn. — Emhart Corp. announced Sunday that it is seeking to acquire Stanadyne Inc. in a deal worth $580 million.

The multinational consumer and industrial products company indicated in a statement that it was taking its offer directly to Stanadyne's shareholders after having been rebuffed by the company's management in discussions last week.

Emhart said it would pay $40 for each outstanding share of Stanadyne's common and Class A stock, but that the proposal, which expires Feb. 8., was conditioned on the offer of 7.4 million shares, or about 51% of the total 14.5 million shares.

Stanadyne, based in Windsor Locks, makes automotive products, precision products, ferrous metals and steel bars. Emhart said it was primarily interested in Moen, Stanadyne's premier plumbing products line.

It said Moen is coming off a fifth record sales year with projected revenue of $285 million.

If combined with Moen, Emhart's total revenue from its Consumer Products Group would surpass $800 million, nearing the company's long-range objective for consumer revenues higher than $1 billion by 1990, Emhart Chairman and Chief Executive Peter L. Scott said.

Scott said he met Jan. 5 with Gerald R. Bouwkamp, president and chief executive officer of Stanadyne, to propose a deal. Initially rebuffed, Scott wrote to Bouwkamp Thursday outlining Emhart's proposal and asking for further consideration.

The letter did not specify a price, except to say that it would "substantially in excess of the current market price per share and current book value per share."

Emhart spokesman John F. Budd said Sunday that Stanadyne responded to Thursday's letter with a telephone call again rejecting the offer.

A telephone call to Stanadyne headquarters in Windsor Locks was answered by a security guard who said company officials were not available and could not be reached.

Emhart, a diversified multinational producer of industrial and consumer products and information and electronics systems, had 1986 revenue of about $2.4 billion. Combined, estimated 1988 revenues would exceed $3 billion, Scott said in the prepared statement.

Emhart closed at $20.625, down 50 cents, in New York Stock Exchange trading on Friday. Stanadyne closed at $22.25, down $3.25, in over-the-counter trading Friday.

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