New bids of $47 and $50 a share were made late yesterday for Equitable General Corp., which already has accepted a $45 a share offer to merge with Great Southern Corp. of Houston.
In a day of hectic corporate maneuvering, a new suitor offered to buy the McLean insurance holding company, and raised its offer, only to have an old suitor of Equitable make a still higher bid.
Equitable General announced yesterday morning that it had received and rejected a pair of offers from Gulf Life Insurance Co. of Houston and its parent, Gulf United Corp. Though the terms were different, each was for $45 a share.
Equitable General's executive vice president, Frank Eslinger, said he returned to his office after distributing that announcement to find the two more proposals had arrived while he was gone.
The first was from Gulf United - which until Tuesday had not participated in the bidding battle for Equitable General - raising its offer to $47 a share.
But Liberty National Life Insurance Co. of Birmingham, Ala., an unsuccesful earlier bidder, came in with a $50 per share offer.
Liberty National had started the auction 10 days ago by offering $45 a share for Equitable General, which at that time was planning to merge with Great Southern for $40 a share.
When Great Southern matched the $45 bid last Thursday, the two companies said their agreement in principal to merge had become a definite agreement.
Equitable General officials yesterday continued to insist that the Great Southern agreement is binding, but said the company's board of directors has not had a chance to evaluate the bids of Liberty and Gulf United.
Equitable General has been looking for a company to acquire it for more than a year and has held negotiations with all three of the bidders.
Under the Great Southern plan, it will pay $45 eash for up to 1.2 million of the 2.8 million outstanding shares of Equitable General. Each of the remaining shares to be exchanged for 0.9 share of Great Southern preferred stock paying a $3 dividend.
Gulf United and Guld Life - which are not related to Gulf Oil - made similiar offers.
Gulf Life offered to buy all outstanding shares of Equitable General for $45, payable either in cash or in 8 percent installment notes.
Gulf United at first offered to pay $45 cash for at least 1 million, and at most 1.3 million, shares. The remaining shares would be exchanged for Gulf United preferred stock, paying a $3.15 dividend and convertible into 2 shares of Gulf United common.
In raising its bid yesterday, Gulf United increased its cahs offer to $47 a share, raised the dividend on the preferred stock to $3.375 a year, and eliminated the minimum stock purchase requirement.
Liberty National's $50 proposition offered shareholders the choice of cash or 8.5 percent Liberty National installment notes. Offering the possibility of a cash and note combination, and several different payment schedules, Liberty National said it was willing to "explore a further tailoring . . . for a few very substantial shareholders."
The terms and the tax implications of any merger are apparently almost as important as the price to Equitable General's management and controlling shareholders.
Many insiders bought or inherited stock that cost $1 a share or less. A cash takeover would mean thay would lose about 45 percent of their profits in capital gains taxes. All of the note and preferred stock plans are designed to be tax-free.
Any merger will require the approval of a majority of equitable General's shareholders, but stockholders close to management are believed to control enough shares to assure a favorable vote.
All of the potential merger partners have said they plan to keep Equitable General's office and staff in McLean. Gulf United's offer also included three-year to five-year contracts for "key members" of Equitable General's management, a factor not mentioned in previous bids.