Neoax Raises Offer For IU To $548 Million
Feb. 01, 1988
NEW YORK (AP) _ Neoax Inc. has increased its hostile buyout offer for IU International Corp. to $548 million in cash and extended the expiration date of its offer for the services company to midnight on Feb. 12.
Neoax, which sweetened its offer Sunday, has also instructed its investment banker to start arranging the intermediate financing for a takeover and urged IU International in a letter to get rid of its ''poison pill'' takeover defense, which it said ''prevents a free choice between our tender offer and your recapitalization proposal.''
Neoax, a Stamford, Conn.-based maker of industrial machinery and vehicles formerly known as White Motor Corp., originally offered $17.50 a share for IU on Jan. 6. Later, on Jan. 17, it said it was willing to pay $19 a share under certain conditions, which were not met.
The offer made Sunday is $20 a share for each of IU International's 27.4 million outstanding common shares and is unconditional, company spokesman Leonard Schwartz said.
IU International's own recapitalization proposal involves paying its shareholders $14 in cash and one new share of IU common stock for each of their existing shares. IU would use cash and securities on hand, new debt issues and sales of various assets to finance the payout.
IU, a Wilmington, Del.-based trucking, food service and waste management holding company, also has said it is considering an alternative $22-a-share self-tender offer for 63 percent of its shares, valued at about $380 million.
Neoax said it had received tenders so far of about 54,000 shares of IU International. That amounts to a fraction of 1 percent of the outstanding shares.
In a letter to John Gilray Christy, chairman and chief executive of IU dated Sunday, Louis A. Guzzetti Jr., president and chief executive of Neoax, said Neoax believes its $20-a-share offer provides ''full value'' to IU shareholders.
Richard Lunsford, a spokesman for IU International, said when contacted at home Sunday that company officials were unaware of the new offer. He added, ''We will respond as we have to the other offers. Our board will review the offer, whatever it may be.''