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WHX Ups the Ante in Its Bid for Teledyne

Mergers: The pot is sweetened to $32 a share to avert a proxy fight. Wall Street approves.


WHX Corp., turning up the pressure on Teledyne Inc. to accept its unsolicited takeover attempt, on Monday raised its offer for the Los Angeles-based conglomerate to $1.78 billion.

In lifting its bid to $32 from $30 for each of Teledyne's 55.7 million shares, WHX urged Teledyne to accept the sweetened price to preclude a proxy fight that WHX is also waging as a parallel effort to gain control of Teledyne.

"Hopefully, we can move forward promptly" with a merger "so that another proxy contest can be avoided," Ronald LaBow, WHX's chairman and a New York-based financier, wrote in a letter to Teledyne's board.

WHX said its new offer is $22 a share in cash--up from $20 originally--and $10 in WHX common stock.

Teledyne, which has been guarded about WHX's overtures, said it will consider the new proposal and will comment further "in due course." Wall Street immediately applauded the higher offer. Teledyne's stock, after climbing to near $29 a share, closed with a 62.5-cent gain at $27.875 in New York Stock Exchange trading.

WHX, the parent of Wheeling-Pittsburgh Steel Corp., initially launched a takeover bid for Teledyne last year, but the company rejected it. WHX also waged a proxy contest to gain seats on Teledyne's board a year ago, but it won only one--taken by LaBow.

This year, all eight of Teledyne's directors are standing for election at the company's annual meeting April 24. And once again, WHX has submitted a full slate of its own nominees for the board--including LaBow.

Teledyne put itself up for sale for a few months last year, but it took itself off the block in October, saying it did not receive any adequate bids.

In the meantime, Teledyne's businesses have been markedly improving, sharply lifting the company's profitability.

Teledyne, which had sales of $2.6 billion last year, runs a wide range of operations, including specialty metals, industrial machinery, aerospace products and its familiar consumer dental equipment under the Water Pik name.

Teledyne's far-flung empire was amassed by former Chairman Henry E. Singleton, who remains a key factor in how Teledyne responds to WHX. He still holds 13.2% of Teledyne's stock; another Teledyne co-founder, George Kozmetsky, owns 5.2%.

"It's an uphill battle with Singleton" that LaBow faces, said Richard Kane, a senior portfolio manager at Dewey Square Investors Corp., a Boston money manager that holds a 9% stake in WHX and supports its bid for Teledyne.

But Kane said he has spoken to LaBow "a number of times about this, and my feeling is that he's very shareholder-conscious and very persistent."

LaBow particularly covets Teledyne's over-funded pension plan, which carries a surplus of about $850 million.

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