Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, March 10, 1994 TAG: 9403100062
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: LON WAGNER
DATELINE: LENGTH: Medium
Tyson, which set up a subsidiary named WLR Acquisition Corp. to buy the shares, said the offer would expire at midnight, April 8, unless extended.
WLR's directors countered with a letter to shareholders saying the board would analyze Tyson's offer carefully and make a recommendation, WLR spokeswoman Gail Price said.
"There's no need for you to take any action now with respect to Tyson's tender offer," said the letter, signed by all 10 board members. "We urge you to wait until you have received your board's recommendation."
Before the takeover attempt, Tyson owned about 5 percent of WLR's approximately 11 million shares outstanding, so the bid put the value of WLR at about $330 million.
Wall Street seems to be betting that Tyson will raise its offer; WLR stock traded above the offer price, at $30.87 1/2 Wednesday. The close, after trading 64,100 shares, was 25 cents a share higher than at the end of trading Tuesday.
Ken Gassman, a consumer analyst with the Richmond securities firm Davenport & Co., said a cultural theory would suggest the Shenandoah Valley producers who own WLR stock would not sell out.
"They are independent folks and, given what we know so far, I don't think $30 a share is enough money for them to change their independent habits," he said.
"A higher number - $33, $34, or $35 - and you may find they'd be less independent."
Tyson says it will stand firm at $30, but the company has a history of raising its offers. In 1989, despite an initial offer of $20 per share less, Tyson succeeded in a hostile takeover of Holly Farms by paying $70 per share.
by CNB