Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, March 4, 1994 TAG: 9403040185
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: LON WAGNER
DATELINE: LENGTH: Medium
WLR spokeswoman Gail Price said the Rockingham County poultry company expected such a move.
Tyson, the nation's largest poultry producer, made its first overture Jan. 24 to WLR's board of directors, which flatly refused the offer.
"It was pretty clear by their continuing advertisements that they had an interest beyond the rejected offer," Price said.
Tyson's $30-per-share proposal means the deal would be worth $329 million. At $30 per share, Tyson is offering shareholders the same price it offered the board of directors.
Tyson has proposed merging WLR into Tyson or a Tyson subsidiary. As an alternative, it offered to negotiate a tax-free reorganization, under which WLR shareholders would get part cash and part Tyson stock for their WLR shares.
Springdale, Ark.-based Tyson, which already owns more than 5 percent of WLR's common stock, said its tender offer to buy outstanding WLR shares begins March 9. The offer comes with some conditions: Tyson's successful purchase must be of a majority of the shares, and a shareholders' vote must give Tyson full voting rights in the WLR shares it buys.
Since Tyson's original offer, WLR has implemented several measures to make a takeover by the Arkansas company more difficult. These so-called "poison pills" include:
Allowing shareholders who own less than 15 percent of the stock to buy more shares at half price, thereby watering down the voting strength of any large acquisitions.
Adopting a protection plan for 600 managers and support personnel deemed likely to lose their jobs if Tyson buys WLR. The plan provides severance pay for those employees, including a $1.8 million "golden parachute" for Chief Executive Officer James Keeler.
Four members of WLR's board, who hold 13 percent of the company's stock, resigned their paid positions with the company so they could vote as disinterested members in the event Tyson calls for a proxy solicitation.
Also, WLR asked U.S. District Court in Harrisonburg to rule the protection plan legal. Tyson has filed counterclaims against WLR's actions.
"As a result of these actions," Tyson Chairman Don Tyson said Thursday, "WLR Foods has attempted to frustrate the voting rights of their own shareholders . . . and to entrench management."
Tyson is interested in WLR primarily because WLR is the fourth-largest U.S. turkey processor. Despite Tyson's dominance in chicken processing and recent ventures in beef, pork and seafood processing, it has no turkey operations.
The Associated Press contributed to this story.
by CNB