Tiger International Inc.'s stock leaped by more than $2 a share in very heavy trading Thursday as its directors met into the night to consider an apparent acquisition offer from what they called "an unrelated third party."
Stock in the parent of Flying Tiger, the world's leading all-cargo airline, closed at $16.875, up $2.125. That tied its 12-month high registered last May 2.
More than 1.4 million shares changed hands, making Los Angeles-based Tiger International the fourth most actively traded issue on the New York Stock Exchange.
Speculation swirled along Wall Street and through the transport industry as Tiger's board met in New York. Tiger on Wednesday issued a two-sentence statement announcing the approach by the unidentified party.
It was the second possible suitor this month. On Dec. 1, New York investor Saul P. Steinberg, who heads Reliance Group Holdings, Tiger's largest shareholder with a 16.5% stake, said Reliance may offer to buy up the company's outstanding stock at an unspecified price that would offer a premium over the prevailing market price.
There are 38.2 million shares of Tiger International common stock outstanding. Besides Reliance, Equitable Life holds a 12% stake. Overall, institutions control 62% of Tiger's stock.
Such a buyout at that time would have an indicated value of more than $377 million, and Thursday's price spurt would boost that well over $400 million.
Among the most interested onlookers are Tiger's 6,300 employees. They played a key role in returning the company's freight-hauling operation to profitability last year after agreeing to pay cuts totaling $55 million in exchange for a share of future profits and warrants to buy up to 10% of the company's stock as of Jan. 1, 1987.
Frank Macguire, who has flown for Flying Tiger for 16 years and chairs the executive committee of the Airline Pilots Assn. in Los Angeles, said the union remains alert but not apprehensive.
"This is not the kind of thing people ought to be jumping out of windows over," Macguire explained. "This is not an airline deal. What this is is a financial deal.
"Saul Steinberg is trying to get what his stock is worth, and I think he'll get it," he said. "It is now a solidly profitable company . . . doing a very good job of utilizing the fleet to generate the maximum amount of revenue."
Macguire added, however, that "the financial community" remains skeptical about the company's true worth because of what he called "distorted" financial reporting by the company when times were tough.
One representative of the skeptical school, in terms of the stock's value, would be Daniel A. Hersh, a Los Angeles-based travel industry analyst for Bateman Eichler, Hill Richards, who called the company's present trading zone "properly valued."
Speculation on the identity of the latest interested party ran the gamut of the airline industry. Among those mentioned who declined to comment on rumor were UAL Corp., parent of United Airlines, and American Airlines parent AMR Corp. Also talked of as possible buyers within the industry were Delta Air Lines Inc., United Parcel Service of America Inc. and Federal Express Corp., among other companies expanding air cargo operations, especially in the Pacific.
But Macguire said his list of candidates would reach outside the industry as well, to include firms that might view Tiger International simply as a good investment.
Since Steinberg first invested in Tiger in 1979, the company has run into rough flying and, in 1986, claimed to be about to fold unless it could slash labor costs. Its employees in December, 1986, agreed to go along. The company returned to profitability in 1987, and the employees last March divided more than $16 million of its $58.7 million in net earnings for the year.
Through September of this year, Tiger had earnings of $56.6 million, and analysts estimated that its 1988 profit may be 40% larger than last year's.