SEAL BEACH — Rockwell International Corp. said Thursday that it will open talks next week with acquisition target Reliance Electric Co., which had requested time to consider Rockwell's tender offer.
Reliance has already agreed to a $1.4-billion stock-swap merger with General Signal Corp. of Stamford, Conn. Reliance said that if it breaks that deal, it would have to pay General Signal a $50-million termination fee plus $5.15 million for expenses.
Rockwell, based in Seal Beach, had wanted a decision by today on its unsolicited, $1.5-billion cash tender offer of $30 a share for Reliance, a Cleveland-based maker of industrial and telecommunications equipment.
The deadline was extended to noon Monday, and representatives of Reliance and Rockwell said they plan to meet before then to discuss a deal.
The General Signal-Reliance Electric proposal was made public Aug. 30. Rockwell made its offer Oct. 20.
"We are making arrangements to meet promptly with Rockwell's representatives," John C. Morley, Reliance president and chief executive officer, said in a prepared statement. "There can be no assurance that any agreement acceptable to the Reliance board will be reached with Rockwell."
Morley said General Signal will abide by Rockwell's acquisition of Reliance if Reliance agrees to a deal and General Signal receives the termination fee and costs. Morley said that without a negotiated agreement the company will stick with General Signal.
Donald R. Beall, Rockwell's chairman and chief executive officer, said the company is pleased that Reliance was ready to discuss its offer.