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Crane Makes $2-Billion Bid for Coltec Industries

Aerospace: The unsolicited offer comes a month after Goodrich agreed to buy the company for $1.7 billion.

December 16, 1998| From Bloomberg News

Crane Co. made an unsolicited $2.02-billion offer Tuesday to buy Coltec Industries Inc., the largest U.S. maker of landing gear for airplanes, in an effort to expand its high-margin aerospace business.

To succeed, Crane, best known for its plumbing supplies, must first win a legal dispute about B.F. Goodrich Co.'s agreement last month to buy Coltec for about $1.77 billion. Crane wants a federal court to strike down terms that make competing bids prohibitively expensive.

Crane is betting it can cut costs, and boost sales and pump up margins by combining its aircraft-brake systems with Coltec's landing gear. The company's main business is distributing doors, windows and building products.

Stamford, Conn.-based Crane is offering 0.8 share of its stock for each Coltec share, a bid now valued at $22.40 a share. That's a 21% premium over the current value of Goodrich's stock offer of $18.48 a share. The buyer also would assume about $608 million in debt.

Crane would nearly double its sales and see an earnings boost in the first year after buying Coltec.

Charlotte, N.C.-based Coltec's shares rose $2 to close at $18.94. Richfield, Ohio-based Goodrich, a former tire maker that's now an aerospace company, rose 56 cents to close at $33.56. Crane fell 25 cents to close at $27.75. All three trade on the New York Stock Exchange.

Coltec's stock has been weighed down in recent weeks by planned production cuts at Boeing Co. Boeing is Coltec's biggest customer, accounting for 18% of sales.

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