An unsolicited takeover bid for Superior Industries International gave way to widespread confusion Tuesday when one of the purported suitors, Prudential-Bache Securities, said it was not involved in the $93-million offer.
Vista Group Ltd., an investment firm in Century City, issued a press release Monday night saying that it and Prudential-Bache had jointly made "a firm offer" to buy Superior for $16 a share. The bid was made in a letter to Superior Chairman Louis L. Borick.
Superior, based in Van Nuys, is a leading maker of wheel rims for General Motors, Ford Motor and Chrysler. The company also produces seat belts, steering wheels and other auto accessories.
But on Tuesday morning, Prudential-Bache issued a statement from its New York headquarters saying that contrary to the news release, the big brokerage house "has not made a firm offer with Vista Group" to buy Superior, which has about 5.8 million common shares outstanding.
Prudential-Bache spokesman Peter Costiglio said in a telephone interview that his firm had sent a "normal introductory type of business letter" to Superior on Jan. 22, offering "to talk to them if they were interested in doing a transaction" that might also involve Vista.
However, Costiglio said the letter "in no way indicated a firm offer, nor could it be construed as anything like that." He said that Vista announced the offer Monday "completely unbeknownst to us," and had "no authorization" to say an offer was made on behalf of Prudential-Bache.
Not so, countered Vista spokeswoman Barbara Blackmore. She said "there in fact was an offer with Prudential-Bache" made for Superior, and said Vista was "trying to straighten things out." She declined to elaborate.
Superior itself then issued a statement saying it "had no interest in holding any discussions" about being acquired through a leveraged buyout. In such a deal, a company is bought with mostly borrowed money that is repaid with funds from the target company's cash flow or from the sale of its assets. Superior said it wasn't holding merger talks with anyone else, either.
R. Jeffrey Ornstein, Superior's chief financial officer, said Superior first rejected the advances of Vista and Prudential-Bache after getting the first letter. He said in a telephone interview that the formal offer Monday came in "a letter from Vista only."
The confusion led to a halt Tuesday in American Stock Exchange trading of Superior's stock, which closed Monday at $11.50 a share. The exchange delayed opening trading in the shares so that investors could analyze the takeover offer, then extended the suspension because of the flurry of announcements that followed, said exchange spokesman Stewart Trisler. The stock should resume trading this morning, he said.
Superior management, however, "was quite upset at the exchange" for the lengthy trading halt, Ornstein said. "Why should a company like Superior get its stock halted and its business interrupted by anyone who wants to just make offers that apparently don't have (financial) backing?" he said.
Borick founded Superior 40 years ago with $3,000 and the company began as a retailer of plastic seat covers. Now employing 2,000 people, Superior in the first nine months of 1987 earned $6.8 million on sales of $122.2 million.
Vista's president is Vipin Sahgal. In 1986, Sahgal, through a company he headed called VFS Holdings, was the middleman who arranged the purchase of the Leo's Stereo chain of stereo stores by Discovery Associates, an Encino investment firm now based in Torrance.