Canadian Group Discloses Stake in International Multifoods
MINNEAPOLIS (AP) _ A group of Canadian investors, headed by the wealthy Bregman and Belzberg families, has disclosed it holds a 7.4 percent stake in International Multifoods Corp. and may seek control of the diversified food company.
In a document filed with the Securities and Exchange Commission late Monday, the Toronto-based group, known as Bregman Partners, said it is considering ″seeking to acquire control of the company through negotiations with the company’s board of directors and management, a tender offer, an exchange offer, a proxy contest″ or other methods.
International Multifoods Vice President and Chief Executive Officer Marvin Eberts acknowledged the filing Tuesday but said further comment would be reserved until company officials examined the 144-page document.
According to its SEC filing, the Bregman-Belzberg partnership has held talks regarding the possible acquisition of the Minneapolis-based food distribution company for about a year.
But negotiations were interrupted recently when International Multifood’s adviser, Goldman Sachs & Co., warned that further stock purchases ″would be construed as unwelcome,″ documents said.
According to the SEC filing, the Canadian partners hold 1.06 million International Multifoods shares. The partners purchased 441,100 shares on the open market between Sept. 14 and Sept. 28 at prices ranging from $32.55 to $34.67 a share, the document said.
In late trading Tuesday on the New York Stock Exchange, International Multifoods shares were up 87.5 cents to $38.125 a share.
Analysts suspect the partnership will launch a takeover bid. ″My gut reaction tells me this group is probably going to make a run on the company,″ said Craig Carver, an analyst with Minneapolis-based Dain Bosworth Inc.
″You don’t go through this whole process and build up ownership unless you’re at least going to go after a piece of the company.″
The development follows a request in July by the Toronto-based Bregman Partners for permission to acquire up to 24.9 percent of International Multifoods, which distributes food products in the United States, Canada and Venezuela. The company reported worldwide sales of $1.4 billion in fiscal 1987.
International Multifoods Chairman Andre Gillet has said he believes shareholders would be best served by the company remaining independent.
″If they make an attempt to come after the company ... Multifoods would probably fight it,″ Carver said.
The International Multifoods stock purchases apparently are part of a wider acquisition strategy by the Canadians. William Belzberg said in August that his company ″is actively moving forward in pursuit of attractive acquisition opportunities, particularly where it can work together with incumbent management.″
First City Industries, Inc. - 69 percent owed by the Belzberg holding company, First City Financial Corp. of Vancouver - earned $101.1 million, or $11.22 per share, for the quarter ending July 30.
The Bregman partnership is controlled by Louis and Michael Bregman and Roxboro Investments Ltd. of Toronto.
In a separate development, International Multifoods announced Monday it will acquire Pueringer Distributing, a Rice, Minn.-based specialty and food- service company that has annual sales of about $120 million.
In a statement, International Multifoods said Pueringer, which employs 400 people, would operate as a separate business unit.