Rales Launches Tender Offer For Interco
NEW YORK (AP) _ A Washington-based investor group today launched a tender offer for Interco Inc. even though the apparel and furniture maker rejected the $2.69 billion bid a week ago.
The group, which is led by the Rales brothers, is offering $70 a share in cash, which values the company at $2.69 billion. Rales and their associates, however, already own about 8.7 percent of Interco’s 38.4 million common shares outstanding.
Last week Interco rejected the offer and took measures to strengthen its defenses against unwanted suitors, including amending the company’s anti- takeover ″poison pill″ so that it takes effect if a suitor acquires 15 percent or more of the company’s stock and makes a bid prohibitively expensive.
In addition, Interco said it was continuing to persue a restructuring plan that would include selling the company’s faltering apparel operations and paying shareholders a special dividend.
The Rales brothers, operating through Cardinal Acquisition Corp. and City Capital Associates, said in a statement that Chase Manhattan Bank has agreed to provide $500 million in financing. Chase also said it is ″highly confident″ it will be able to raise another $2.15 billion from a syndicate of other banks.
The group headed by Steven Rales, 37, and his brother, Mitchell, 31, approached the Interco board with a $64-a-share takeover bid last month. The group sweetened the offer to $70 a share but again was rebuffed. Some analysts have estimated that Interco might be worth as much as $78 a share.
On Wall Street, Interco jumped $2.25 to $72.25 in active, early trading on the New York Stock Exchange.
Based in St. Louis, Interco makes men’s and women’s apparel and footwear as well as furniture and home furnishings. Some of its brand names include London Fog clothing, Florsheim and Converse shoes, and Broyhill and Ethan Allen furniture.
In addition to its manufactufing operations, the company operates 201 home improvement centers, general merchandise discount stores, men’s specialty apparel shops and specialty department stores in 15 states.
The company reported revenues of about $3.34 billion last year, with the apparel group contributing about 24 percent.
The tender offer expires at midnight EDT Sept. 12, unless extended.