Top management of Los Angeles-based Postal Instant Press, the nation's largest franchiser of quick printing stores, offered on Friday to buy the company for $66 million.
The $17-a-share offer comes after two other companies have separately accumulated a 35% stake in the company and have signaled their interest in buying more.
One of the companies, Kane-Miller Corp. of Tarrytown, N.Y., launched an unsuccessful, $18.50-per-share takeover bid last July. The meat and cheese distributor agreed last September to limit its stake in PIP to 18% through mid-1990 in exchange for naming two directors to PIP's board, which expanded to nine members from seven.
Then, earlier this month, a group of investors led by New York-based Orion Capital Corp. began buying up PIP shares, which enabled Kane-Miller to cancel its agreement and start buying again.
Offer Expires in March
With at least three possible bidders for the company, PIP said Friday that it would refer management's offer and any future acquisition proposals to a special committee of the board, which would then make a recommendation to the entire board. The board also retained Kidder, Peabody & Co., a New York investment bank, as an adviser.
PIP has about 1,100 franchises scattered across the United States, Canada and Great Britain. A franchise costs $92,000 plus up to 9% of sales for 20 years. In exchange, the purchaser of the "while you wait" printing franchise receives advice, advertising support, limited printing equipment and exclusive rights to use the PIP name in a given area.
The widening battle for control of PIP was predictable, given its consistently high profitability, said Tom Crouser, a printing industry consultant in Charleston, W. Va. "I've been expecting someone to come along and pick it up for a long time. . . . It's a real gem, a good strong company."
PIP's pretax income for the year ending June 30 was $6.5 million, an unusual 28% of its $22.9 million in sales. Pretax profit would have been even higher if the company hadn't taken a $1.27-million loss for uncollectible bills.
Friday's $17-a-share offer was made by a group of investors including Chief Executive Thomas C. Marotto, other members of current management and Golder, Thoma & Cressey, a Chicago-based firm specializing in buyouts by management. The proposal expires on March 17.
In a filing on Tuesday with the Securities and Exchange Commission, Kane-Miller said it held 19.3% of PIP's outstanding shares and might "decide to seek control of PIP."
Kane-Miller also revealed Tuesday that it was canceling September's agreement with PIP because Orion Capital Corp. and its partners had bought 12.7% of PIP.
In a filing on Wednesday with the SEC, Orion and its partners said they have since raised their stake in PIP to 15.5%.
Meanwhile, another group of outside investors disclosed Friday that they had sold their 5.59% interest in PIP. Milwaukee-based Diana Corp. and Farm House Foods Corp. said they sold their shares earlier this month but gave no reason.
Postal Instant Press stock rose 12.5 cents a share on Friday to close at $16.25 on the American Stock Exchange. The stock had already risen 25 cents on Tuesday and 37.5 cents on Wednesday and again on Thursday.