Merger & acquisition news

Merger & acquisition news

PNC shareholders clear plan to acquire Midlantic Corp.

Shareholders of PNC Bank Corp. gave the green light to its pending $3 billion purchase of Midlantic Corp. based in Edison, N.T. Midlantic has $13.9 billion in assets and 338 branches, and serves a total of 650,000 households. Approximately 81% of the shares cast at a recent shareholder meeting approved the transaction which instantly makes PNC the number two ranked bank in Philadelphia and the number three bank in New Jersey. PNC Chairman and Chief Executive Thomas H. O’Brien predicts that the combined banks could reduce costs by at least $150 million annually over the next two years. In addition, the deal promises to add seven cents a share to net income in 1996 and 20 cents a share in 1997. Also, the purchase will substantially reduce PNC’s current dependence on borrowed funds. Wholesale funds which at the present time account for just over 40% of PNC’s assets, will be reduced to 30%, closer to that of other banks, by the closing of the deal. It is likely that PNC will take at least a $300 million charge during the fourth quarter in order to reclassify some held-to-maturity securities as held-for-sale, and eventually sell them.

First Interstate again rejects Wells Fargo’s takeover bid

Wells Fargo & Co. headquartered in San Francisco plays the role of the rejected suitor again as First Interstate Bancorp rejected a sweetened takeover bid of $10.69 billion underscoring its support for Minneapolis-based First Bank System Inc.’s $10.29 billion offer. However, before Wells Fargo is able to put its offer to a vote of First Interstate shareholders, it is required to get rid of an anti-takeover measure that permits First Interstate’s board to thwart a hostile bid. The company has resorted to a lawsuit and is attempting to convince First Interstate shareholders to supplant the board with a Wells Fargo slate. At the same time, First Interstate intends to place First Bank’s bid to a shareholder vote. While no official date has been set, First Bank announced it may occur in March. While the Wells Fargo offer is higher, First Bank and First Interstate continue to insist that it would eventually be worth less to First Interstate shareholders. William E.B. Siart, chairman and chief executive of First Interstate maintains that a Wells Fargo-First Interstate combination would have a smaller revenue base and far less geographical variety than a First Bank-First Interstate combination.

Nexgen approves shareholder plan to protect their acquisition by AMD

Nexgen Inc. has adopted a poison-pill defense, a maneuver to protect itself from Sunnyvale, CA.-based Advanced Micro Devices Inc.’s friendly offer to purchase and guarantee shareholders that they will have a chance to approve the merger. The poison pill involves issuing a contingent right to buy a fractional share of a newly created series of Nexgen preferred stock should a person or group purchase in excess of 15% of Nexgen’s common stock.

G.M. and Swedish investor in talks regarding Saab

Saab Automobile A.B. is spinning its wheels again and General Motors Corporation and Investor A.B. of Sweden, which hold 50% stakes, are in mulling over the future of the company which reported losses of $48 million in the third quarter. Industry observers are saying that G.M. may take over Investor A.B.’s stake in Saab. Investor A.B. is controlled by the Wallenberg family of Sweden.

Angelica’s recent acquisition opens new geographic territory

Angelica Corporation’s acquisition of HLA Services Inc., a hospital cooperative laundry in Boston, Ma. with annual revenues of approximately $10,000 will put the rental services business into an important, new geographic area. The transaction exemplifies the current trend of hospitals in their shift from on-premise and cooperative laundries to lower-cost contract laundry service.

Diller is negotiating to buy TV stations of Savoy Pictures

Entertainment magnate Barry Diller is in discussions to purchase the TV stations of Savoy Pictures Entertainment Inc. as part of a strategy to begin a brand new programming network. Earlier in ’95, Diller’s Arrow Holdings purchased a controlling stake in Silver King Communications Inc., a total of 12 TV stations that offer programming provided by the cable service Home Shopping Network Inc. It was Diller’s intention then to utilize the TV stations as a base for a new TV network. While details of the proposed transactions were not available, industry observers say Silver King plans to purchase all Savoy shares in a noncash stock deal. At present, Savoy has VHF TV stations in Honolulu, New Orleans, Mobile, Ala., and Green Bay Wis. Diller, the former chairman of Fox Inc., has been eager to get back into the big leagues of the entertainment industry and the purchase would do just that — Fox Television Stations Inc., a subsidiary of Fox Inc., owns 25% of SF Broadcasting, Savoy’s TV station subsidiary although it has no say over the actual operation of the stations. Savoy recently reached the decision to cut back its role in the movies to concentrate on purchasing TV stations and producing TV programming. Pairing Silver King with HSN — the two were divided in 1992 to meet with federal requirements — would put Diller back into the arena of home shopping. HSN, which is seen in 28 million homes is headquartered in St. Petersburg, Fla.

Softkey suffers setback in bid for Learning Co.

A Delaware court has rebuffed Softkey International’s efforts to invalidate a bylaw revision by the Learning Company which Softkey maintains thwarted its hostile takeover offer. Earlier, The Learning Company and Broderbund Software Inc. had proposed a friendly all-stock deal valued at $460 million. Shareholders were to vote on the plan at a meeting scheduled for Dec. 11. Softkey has made a bid of $570 million for the Learning Company and would like to hold a meeting Dec. 13 to supplant the Learning Company’s board. The three companies all develop and market computer software.

Westinghouse receives final approval in CBS acquisition

Pittsburgh-based Westinghouse Electric Corp. has received the green light from the Federal Communications Commission to complete its $5.4 billion purchase of CBS Inc., the nation’s oldest broadcaster. Forthcoming management changes will be announced along with strategies for strengthening the network. Currently, CBS is lagging behind Fox in key viewer demographics and is trailing ABC and NBC. The deal will unite 39 radio stations and 16 television stations reaching an estimated 33% of American homes All total, the FCC granted Westinghouse a record 1 waivers, 11 of them temporary, from rules restricting media concentration. Within a year’s time Westinghouse may end up owning only 12 TV and 38 radio stations. It will be required to sell either a television station or a radio station in Los Angeles, New York, Chicago, Philadelphia, San Francisco and Detroit However, it was granted authority to operate both television and radio stations indefinitely in Minneapolis, Boston and Washington.

Healthcare merger is on the rocks again

New woes may thwart the multi-billion-dollar deal between Health Systems International Inc. and WellPoint Health Networks Inc. Inside sources have disclosed that Malik Hasan, CEO of Woodland Hills-based Health Systems and WellPoint CEO Leonard Schaeffer fail to agree on what responsibilities each would have in the new company. In the current configuration, Hasan would be chairman and Schaeffer, CEO. However, Schaeffer would like the merger agreement revised to provide him with greater input in future mergers and acquisitions. The merger has become further complicated by a lawsuit WellPoint’s parent firm, Blue Cross of California has filed against an accrediting body which gave Blue Cross CaliforniaCare health plan a mediocre review.

Buffton adopts poison pill plan

In an effort to keep with the spirit of the times, Buffton Corp., a holding company headquartered in Fort Worth Texas, has announced that its poison-pill plan will now be set in motion when a 15% stake is purchased. Shareholders will be allowed to purchase stock at a discount if 15% or more of the company’s voting power is acquired without shareholder approval. Earlier, Buffton required a purchase of 30% in a tender offer, or of 20% in another kind of offer. At present, the company is unaware of any offers from outsiders.

Wallace exerts pressure on Moore board in takeover attempt

Holders of 73.5% of the shares of Wallace Computer Services Inc. have tendered to Toronto-based Moore Corp.’s $1.38 billion bid, exerting pressure on the Wallace board to reach an agreement and end the unsolicited offer fight. In order for Moore’s bid to succeed, it must convince the Wallace board not to employ its takeover poison-pill defense. Wallace says it still considers Moore’s $60-a-share offer inadequate. The offer is due to expire Dec. 11.

Analysts and Wallace shareholders were caught off guard by the high level of tenders, considering it a significant victory for Moore. Wallace has maintained that it needs to stay independent if it is to enjoy strong growth in revenue and earnings. However, the level of tenders is a loud and clear signal that shareholders aren’t willing to support the Wallace management. The takeover battle is being waged on a number of fronts: A court hearing in a Delaware court pertaining to several lawsuits and countersuits the parties have launched; also, Moore has plans for a proxy battle at Wallace’s annual meeting scheduled for Dec. 8.

Illinois Central seeks to acquire some SP lines

Illinois Central Corp., the parent of Illinois Central Railroad has said in a recent Interstate Commerce Commission filing that it has offered to acquire Southern Pacific lines from Memphis, Tenn. to Dallas, Houston and Brownsville, Texas, and from New Orleans to Houston. The offer was made in connection with Union Pacific Corp.’s proposed $3.9 billion purchase of Southern Pacific.

Copyright Quality Services Company Dec 4, 1995

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