Tipping the scale significantly in the contest to acquire Irvine-based National Education Corp., publisher Harcourt General Inc. on Thursday said it sweetened its bid to $21 a share, or about $797 million.
Last month, Harcourt offered $19.50 a share for the world's largest provider of correspondence courses, or $740 million. The unsolicited bid topped the all-stock deal that National Education agreed to in March with Sylvan Learning Systems Inc. of Baltimore.
The new offer is "a significant step toward a friendly transaction," said Peter Farwell, a spokesman for Chestnut Hill, Mass.-based Harcourt.
"I think Harcourt has carried the day," said analyst Stephen D. Weinress at L.H. Friend Weinress in Los Angeles. "I don't think Sylvan can match it."
Analyst Michael T. Moe at Montgomery Securities in San Francisco said $21 is "a strong offer," although it could go slightly higher. But he doubted that Sylvan would even make a counter bid. "If Harcourt hasn't won, I think it can see the finish line from where it's at," he said.
National Education had little comment, other than saying that it had rejected Harcourt's earlier offer and that it will permit the publisher to conduct a review of its finances next week. It said there is "no assurance that the discussion with Harcourt would lead to an acceptable transaction."
In New York Stock Exchange trading Thursday, NEC's stock rose 25 cents a share to close at $20.50, while Harcourt fell 50 cents to $45.75.
Responding to Harcourt's latest offer, Sylvan spokeswoman Vickie Glazar said, "We intend to proceed as planned."
The proposed Sylvan transaction, billed as the "biggest deal in the history of the industry" when first announced, is currently worth about $688 million. Sylvan's stock closed Thursday at $31.25 a share, up $1.125 in Nasdaq trading.