Trading of Uniroyal Stock Suspended Pending Merger Announcement
MIDDLEBURY, Conn. (AP) _ Trading of Uniroyal Inc. stock was interrupted Monday as the company’s board of directors met to consider either a friendly merger or a leveraged buyout that would take the company private.
The meeting came three days after reports that Uniroyal had been considering an offer from the Ethyl Corp. of Richmond, Va.
The company’s stock later resumed trading, opening up $1.121/2 a share at $20.
Uniroyal has been trying since April 10 to fend off an unfriendly takeover bid by investor Carl C. Icahn, who was scheduled Monday to begin a court challenge to a shareholder vote that narrowly approved two measures designed to thwart hostile takeovers.
But the secretary for New Jersey state Judge Robert E. Tarlton in Jersey City, where Uniroyal is incorporated, said the court case had been postponed. One of Icahn’s attorneys, Gregory B. Reilly of Roseland, N.J., said attorneys for Icahn and Uniroyal were meeting in New York.
Uniroyal spokesman Yanis Bibelneiks said, however, that his company’s board of directors was meeting in New York ″related to a proposed merger offer.″ He declined to provide details of that offer.
Rob Buford, an Ethyl spokesman, said his company would ″not comment on any acquisition activities.″
On Friday, the New York Times, quoting unidentified Wall Street sources, reported that Ethyl Corp., which makes petroleum and specialty chemicals including anti-knock compounds and other fuel additives, had offered Uniroyal $21 per share for all of Uniroyal’s 33.9 million outstanding shares of common stock.
At that price, the deal would be worth about $713 million.
Icahn had offered $18 per share for up to 53 percent of Uniroyal’s stock. Uniroyal then would have been merged into one of Icahn’s companies, with remaining shareholders getting $18 per share worth of debt securities.
The Icahn effort was somewhat derailed last week, however, when Uniroyal shareholders narrowly approved measures that staggered the terms of the company’s board of directors and mandate that anyone taking the company over would have to offer all shareholders the same price on the same terms.
Icahn, however, planned to challenge the April 16 vote in court, saying Uniroyal had illegally refused to count 491,700 votes cast by one of representatives because he did not ″write his name on the legal proxy.″
In a leveraged buyout, a group, usually management, takes a public company private by buying control with borrowed money to be repaid from anticipated future revenue of the company.