REYNOLDS IN BID WAR; REBUFFED ALCOA OUT TO CONTROL STOCK.Byline: D.W. Page Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. Alcoa Inc., spurned spurn v. spurned, spurn·ing, spurns v.tr. 1. To reject disdainfully or contemptuously; scorn. See Synonyms at refuse1. 2. To kick at or tread on disdainfully. v. by the board of Reynolds Metals Reynolds Metals Company (RMC) was the second largest aluminum company in the United States, and the third largest in the world. The company became well-known for the consumer product Reynolds Wrap as well as being a leader in developing and promoting new uses for aluminum; Co., is taking a hostile $4.2 billion takeover bid Noun 1. takeover bid - an offer to buy shares in order to take over the company two-tier bid - a takeover bid where the acquirer offers to pay more for the shares needed to gain control than for the remaining shares directly to Reynolds' shareholders. Alcoa, the world's largest aluminum maker, is offering $65 a share for No. 3 Reynolds, an offer deemed inadequate by the Reynolds board. In a joint written statement Monday, Alcoa officials said they would prefer to negotiate a takeover with Reynolds' management but will begin an all-cash offer to Reynolds' shareholders this week. They said they will solicit shareholder support for replacing the Reynolds board and dismantling dis·man·tle tr.v. dis·man·tled, dis·man·tling, dis·man·tles 1. a. To take apart; disassemble; tear down. b. its takeover defenses takeover defense See shark repellent. . The Reynolds board on Sunday unanimously rejected Alcoa's cash-and-stock offer valued at $65 a share. On Monday, the board advised shareholders to sit tight in the wake of Alcoa's hostile bid. ``Alcoa's actions are designed to serve Alcoa's own interest and not the interests of Reynolds Metals' shareholders,'' the Reynolds board said in a joint written statement. ``Shareholders need take no action at this time,'' Reynolds said in a terse Terse - Language for decryption of hardware logic. ["Hardware Logic Simulation by Compilation", C. Hansen, 25th ACM/IEEE Design Automation Conf, 1988]. statement. Analysts estimated the value of Reynolds stock at $70 to $80 a share. Alcoa ``offered the low-ball bid in hopes getting Reynolds as cheap as possible,'' said Lloyd O'Carroll, an analyst for the Richmond-based investment firm Scott & Stringfellow Inc. ``My guess is that the low offer is part of their overall strategy, knowing the board would reject it. By going directly to the shareholders, perhaps they are hoping to throw a little fear into the board before talking sweet to them,'' said O'Carroll, a former chief economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the for Richmond-based Reynolds. Traders began betting on a better offer last week, bidding the price of Reynolds above Alcoa's offer. On Monday, Reynolds fell 43.75 cents to $68.9375 a share on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . That's about 6 percent more than Alcoa's bid and represents expectations that a takeover will cost at least an additional $200 million. Shares in Pittsburgh-based Alcoa, which have more than doubled in value over the past year, rose 37.5 cents to $66.875. In announcing the initial bid for Reynolds, officials of Pittsburgh-based Alcoa valued the deal at $5.6 billion, but provided no details. At $65 a share, the deal would be worth $4.2 billion based on the number of Reynolds shares outstanding. Alcoa's offer was followed Friday by disclosure of an all-cash bid from Michigan Avenue Partners, a Chicago real estate investment group that entered the metals industry last year by purchasing a Reynolds plant in McCook, Ill. In the past 18 months, the investment group has purchased about $1 billion in aluminum assets. Michigan Avenue Partners called their offer superior to Alcoa's but disclosed no details. ``Michigan Avenue is a major real estate developer in the Chicago area. They are players,'' O'Carroll said. In rejecting the bid from Alcoa, the Reynolds board said it would explore all alternatives for shareholders, including the sale of the company. |
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