Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, May 18, 1994                   TAG: 9405180063
SECTION: BUSINESS                    PAGE: B8   EDITION: METRO 
SOURCE: LON WAGNER STAFF WRITER
DATELINE:                                 LENGTH: Medium

DOES CLINTON IMPEDE TYSON'S TAKEOVER CHANCES?

There's the Whitewater mess and the sexual harassment lawsuit. But have Clinton's Arkansas days become so tarnished as to affect a vote Saturday in the Shenandoah Valley?

As far-fetched as it may seem, Rockingham-County-based WLR Foods Inc. may have Clinton to thank if it holds off Arkansas-based Tyson Foods Inc.'s $329 million hostile takeover bid.

``Obviously, from a media standpoint WLR is trying to say, `Preserve Virginia - keep it away from the ugly outsider,''' says John M. McMillin, a Prudential Securities Research analyst who follows Tyson's stock.

"The relationship between Tyson and Clinton has almost played into WLR's hands; it's, in a way, unfair."

In other ways as well, the back-and-forth over Tyson's $30 per share offer to buy out WLR mirrors a political contest. That's what makes this hostile takeover attempt unique.

The rule of thumb in traditional political battles is 40 percent of the votes automatically go to the Republican candidate, 40 percent go to the Democrat and the outcome rests with the independent voters. All the television ads aim at the 20 percent who say they are undecided.

In the case of Tyson vs. WLR, analysts are certain institutional shareholders - pension administrators, mutual fund managers - will cash in their WLR stock, profiting by the gain of at least $10 a share that it jumped when Wall Street responded to Tyson's bid.

The other stalwart voters are on WLR's side: WLR's board members, their families and other stockholding employees.

The swing voters are the poultry growers, thought to hold about 20 percent of WLR's stock. The growers became owners/farmers in 1988 when Wampler-Longacre bought out the Rockingham County poultry cooperative by issuing stock to its owners, the poultry producers.

On Saturday WLR stockholders will meet at Turner Ashby High School in Bridgewater to vote whether to grant Tyson voting rights for the shares of WLR stock it has acquired. Tyson said in early March that it held more than 5 percent of WLR's 11 million shares of common stock.

All the ads, and Tyson Chairman Don Tyson's attention, have focused on the growers since early March when the Arkansas company took its offer directly to WLR shareholders. Tyson bought advertising in the Harrisonburg paper soliciting letters and phone calls from growers.

But as hostile takeovers go, this one has been fairly mild. Much of WLR's public relations defense has played the Shenandoah Valley company as the homegrown innocent, unfairly attacked by a "corporate raider from Arkansas."

WLR President James Keeler, in an April letter to Tyson, took the tone of a mother whose favorite child has just let her down. Keeler wrote to tell Tyson ``how disappointed I am with the manner in which Tyson Foods Inc.'' tried to take over WLR.

One of the things working against Tyson is that WLR truly is a locally grown company. Growers say if they have a problem, they can call Board Chairman Charlie Wampler or Keeler at home and get it straightened out - or at least be heard.

WLR has played on those relationships.

Keeler wrote Tyson that he had tried to take over the company ``in a way that unfairly attacks the integrity and good intentions of the people who helped build WLR Foods.''

Many growers, through their work with the old cooperative, would fit the description of ``people who helped build WLR Foods.'' Some of them worry that a Tyson buyout would allow the big companies too much authority in dictating growing contracts to the producers.

``It's difficult when you've got to put the weight of your business against the weight of your stock,'' McMillin said.

Tyson has promised to "go home" if the shareholders don't grant him voting rights Saturday. If Tyson loses the vote, it could be due more to local pride and fear of slick-talking people from Arkansas than traditional business decisions.

Could Clinton's unpopularity in heavily Republican Rockingham County really make a difference?

"I think we're at a point where every vote counts," McMillin says.