Pay ’N Pak Says 97 Percent Of Stock Tendered In Management Buyout Offer
SEATTLE (AP) _ Pay ’N Pak Stores Inc. said Monday that about 96.7 percent of its common stock was tendered under a $212.5 million buyout offer from an investor group led by senior members of management.
Those tendering shares included investor Paul Bilzerian, who held a 10 percent stake in Pay ’N Pak and had waged a bitter takeover fight for the specialty retailer before being blocked by federal and state courts.
Doug Southern, Pay ’N Pak’s vice president for finance, said a preliminary count indicated about 9.67 million of the company’s 10 million common shares outstanding were tendered by the midnight EDT Friday deadline for the offer.
The management group, led by chairman David Heerensperger, had offered $21.25 a share in cash and preferred stock for up to 8.1 million Pay ’N Pak shares.
Because more than 8.1 million shares were tendered the group will pay for the shares on a pro-rata basis, with shareholders being paid cash and preferred stock for 83.7 percent of their shares and preferred stock for the rest once the merger is completed.
Kent-based Pay ’N Pak sells building materials, plumbing supplies and other home improvement equipment. It operates 107 stores in 17 states, primarily in the West.
Southern said a wave of shareholders tendered their stock late Friday following two court rulings that blocked Bilzerian’s hostile overtures and cleared the way for the management-led group’s tender offer.
Late Friday, U.S. District Judge John Coughenour refused to lift a restraining order prohibiting Bilzerian from acquiring more Pay ’N Pak shares.
The judge issued the order late Wednesday after Bilzerian attempted to acquire a 4.1 million-share block of Pay ’N Pak shares, which combined with his existing holdings would have given him a 51 percent, controlling stake in the company.
Also Friday, Judge Gary Little of King County Superior Court refused a request by a group of Pay ‘N Pak shareholders to issue a restraining order against the tender offer. The shareholders made the request in a still-pending lawsuit they filed against Pay ’N Pak alleging the that bidding for the company was conducted improperly.
Pay ’N Pak since April had rebuffed several buyout proposals from Bilzerian as inadequate, and rejected his latest $21.25 a share offer on the grounds it already had a deal with the mangement-led group.
Bilzerian, nevertheless, could make a sizable paper profit on the buyout. Filings with the Securities and Exchange Commission indicate he purchased the bulk of his Pay ’N Pak stock for prices ranging from $11.54 to $13.41 per share.