Gaf Makes New $4.5 Billion Cash Offer for Union Carbide / Bidding for 90 Percent of Stock

Article excerpt

NEW YORK - GAF Corp. stepped up its effort to take over Union Carbide Corp. on Thursday with a new cash offer of $74 a share for the 90 percent of Carbide's stock it does not already own, or a total of about $4.5 billion.

The bid was $6 higher than its last offer, which encompassed 48 million shares, or 71.3 percent of Union Carbide's outstanding shares.

Union Carbide, which has been opposing GAF's takeover attempt, offered last week to buy back 35 percent of its shares for $85 each - $20 in cash and $65 in securities. However, analysts have said the market might value the securities at less than $65.

In a letter to Warren Anderson, chairman and chief executive officer of Union Carbide, GAF Chairman Samuel J. Heyman called on Union Carbide to stop resisting GAF's overtures and accept a peaceful merger with GAF.

Otherwise, Heyman said, GAF will continue to stand by its latest bid ""and to urge all other Carbide shareholders to do so as well.''

At Union Carbide's headquarters in Danbury, Conn., spokesman Tom Sprick read a statement saying company officials had not received the details of the latest ""revision of (GAF's) original, wholely inadequate offer.

""When they do, our board of directors and management will review them in the context of our unequivocal commitment to protecting both the near-term and the long-term vital interests of our shareholders,'' he said.

Union Carbide, which owns Presto Welding Supplies Inc., 2701 W. Reno Ave. in Oklahoma City, said last week that if GAF acquired more than 30 percent of Carbide shares, Union Carbide would increase the scope of its offer to include 70 percent of its outstanding common stock.

Some Wall Street analysts suggested the $65 in securities Union Carbide offered might turn out to be worth less than $65, and that GAF's latest offer might thus appear better by comparison.

""Heyman has offered $74 on the barrelhead, while Carbide's offer is worth less than $70,'' said Peter E. Butler, an analyst at the Paine Webber investment firm.

William Young, at Dean Whitter Reynolds, said the latest GAF offer ""looks pretty strong.''

""But,'' he added, ""we haven't heard the response from Mr. Anderson yet.''

Butler said that at this stage in the bidding, he thought it unlikely that Union Carbide might find a ""white knight,'' the Wall Street term for a company that rescues the target of a hostile takeover bid by agreeing to a friendly merger.

""So if you rule out a "white knight,' what Carbide will have to come up with is more cash, because adding more debt would not change their offer any,'' he said. …