NEW YORK — American Standard Inc., eager to avoid the clutches ofBlack & Decker, on Tuesday rejected a sweetened $2.03-billion bid and revealed defense measures, including a "poison pill," aimed at avoiding the takeover.
The company, which considers the Black & Decker offer hostile and is apparently determined to avoid it, said in government filings that its board authorized management to examine an array of alternatives, such as a leveraged buyout or outright sale of the company.
It also announced a poison pill measure in the form of a shareholder rights plan--set to expire March 16--that would significantly dilute the stake of any holder with 15% or more of the company.
Want 'Best Deal'
It further said there were companies expressing an interest in acquiring it, but was mum on disclosures, saying that its board decided Monday that no details on any negotiations would be revealed until an agreement in principle was reached.
"It seems they're trying to buy time to get the best possible deal, whatever it is," said Katherine Stults, analyst at Dean Witter Reynolds.
Black & Decker on Friday raised its original $56-a-share, or $1.8-billion bid, for the maker of toilet bowls, washbasins, bathtubs and Trane air conditioners, to $65 a share. The original offer was made Jan. 27. American Standard shares rose 37.5 cents Tuesday to $67.25.
American Standard Chairman William B. Boyd, in a letter to shareholders, said the latest offer was inadequate and not in their best interests and urged them not to tender their stock.
Plan Offers Time
"Since the commencement of the offer, Goldman Sachs (American Standard's financial adviser) has been approached by several companies expressing an interest in the possible acquisition of American Standard," it said in documents filed with the Securities and Exchange Commission.
However, it did not identify potential suitors or say whether it was already in negotiations with a "white knight" to help it avoid Towson, Md.-based Black & Decker.
It also said it was considering other alternatives that would allow it to remain independent. These options include a stock repurchase, recapitalization, or other form of restructuring.
American Standard said the interim shareholder rights plan was intended to allow the board time to consider the company's alternatives.