American Standard Rejects Black & Decker's Sweetened Offer
Feb. 09, 1988
NEW YORK (AP) _ American Standard Inc. has rejected as inadequate a $2.1 billion sweetened buyout offer from Black & Decker Corp. and adopted a ''poison pill'' defense aimed at hindering a hostile takeover, American Standard said today.
In a letter sent today, Chairman William B. Boyd urged shareholders not to accept Black & Decker's offer to pay $65 a share for American Standard's 31.2 million common shares outstanding.
He also said American Standard was ''exploring all reasonable financial alternatives to Black & Decker's offer which might result in enhanced values for the stockholders.''
American Standard, whose board voted to reject the offer on Monday, said its financial advisor, Goldman Sachs & Co., has been approached by several companies interested in a possible bid for the company. However, it did not identify those firms.
American Standard stock jumped $1.25 to $68.12 1/2 a share in early New York Stock Exchange trading. Black & Decker rose 50 cents $19.62 .
Black & Decker, a Towson, Md.-based tool, and appliance maker last week sweetened its offer to $65 per share from $56 per share, and indicated Monday it might be willing to go even higher.
Black & Decker spokeswoman Barbara Lucas said today the company had no immediate comment on the board's action.
American Standard also said it asked the U.S. District Court in Delaware to validate its anti-takeover plan, which would allow its shareholders to buy American Standard stock at $32.50 a share, or half the price of Black & Decker's latest offer, if a bidder acquired 15 percent or more of its stock.
The so-called ''poison pill'' is intended to make a hostile takeover prohibitively expensive.
Black & Decker had said its offer was conditioned on an agreement by American Standard shareholders that the company not be governed by a new anti- takeover law in Delaware, where American Standard is incorporated.
The Delaware Legislature last month tightened the state's takeover laws by requiring that a bidder which acquires 15 percent of a company's stock must wait three years to complete a takeover. The restriction does not apply if the bidder acquired at least 85 percent of the target company's stock in the same transaction that its holdings surpass the 15 percent threshold.
Black & Decker and others have filed suit in federal court to challenge the new law.
Black & Decker said the expiration date of its offer remains Feb. 24.