Fairchild Industries Inc. has proposed a business combination with Bunker Roma Corp., which would create a diversified aerospace and electronics company with annual sales approaching $1 billion.
According to announcements by the two firms yesterday, Fairchild has offered to buy about 27 percent of Bunker Ramo's voting securities for $47.6 million, followed by a merger of the electronics company into a Fairchild subsidiary.
Fairchild, based in Montgomery County, already owns 18 1/2 percent of Bunker Ramo's voting securities. Last January, Fairchild purchased 1.17 million common shares for $27.4 million form Martin Marietta Corp., another large industrial firm based in Bethesda.
Bunker Ramo, with headquarters in Oak Brook Ill., designs and produces electronic connectors, components and sophisticated information systems. After a reorganization, the company's sales and profits have been expanding and reached record levels last year, when Bunker Ramo earned $18.8 million on sales of $383 million.
Fairchild also has been expanding rapidly, primarily because of a U.S. Air Force contract for 783 A-10 close air support fighters, with a potential for overseas sales of the planes.
Details of a complicated tender offer made public yesterday indicate that Fairchild would pay some $100 million in cash and securities for the Bunker Ramo shares not already owned.
"Fairchild's proposal will be considered by our board after completion of the necessary study and analysis," said Bunker Ramo president George S. Trimble. "We believe we are in a position to continue the aggressive growth of our company."
An unfriendly takeover of the electronics company appears unlikely because Fairchild agreed, earlier this year, that it would not increase its holdings of Bunker Ramo common stock without the consent of the Bunker Ramo board. Fairchild Chairman Edward Uhl is one of Bunker Ramo's 11 directors.
Under terms of the Fairchild bid:
The Germantown firm first would offer $28 a share in cash for 1.7 million shares of Bunker Ramo $1.50 cumulative preferred and common stock, equal to 27 percent of voting securities. Fairchild earlier paid $23.50 a share when it acquired 18.5 percent of voting securities.
Fairchild would accept all preferred shares tendered (there are 644,000 outstanding) and the number of common shares required to bring the total to about 1.7 million for both classes. Bunker Ramo has 5.69 million common shares outstanding.
After the cash tender offer, Bunker Ramo would be merged into Fairchild and each of the remaining preferred and common shares in Bunker Ramo would be exchanged for a package of Fairchild securities that would include a fraction of Fairchild common with a market value of $14 plus one-half share of a new, 25-year preferred stock with a cumulative dividend of $2.66 a share and a liquidation of $28 a share.
Fairchild officers declined to estimate the value of the proposed exchange offer but analysts said itwas about $28 a share-the same as the initial cash offer. Fairchild said it asked Bunker Ramo to consider the plan as quickly as possible and said the cash offer would begin as soon as there is such approval and agreement for a merger.
In connection with its earlier purchase of Bunker Ramo stock, Fairchild obtained a bank commitment for up to $27.5 million of money. None was borrowed under the agreement, which expires June 30, but a spokesman said yesterday that a new bank loan commitment has been made to help finance the new merger plan. He declined to discuss the amount.
At the end of 1978 Fairchild had working capital of $72 million compared with $46.5 million a year earlier. The company's long-term debts as of Dec. 31 were $24.7 million, down from $30.1 million at the end of 1977.
On the New York Stock Exchane yesterday, the stocks of both firms advanced in active trading. Bunker Ramo rose 1 5/8 to 27 3/8 while Fairchild climbed 1 to 33 1/2. CAPTION: Illustration, Bunker Ramo Fairchild Industries; Table 1, FAIRCHILD INDUSTRIES INC. Germantown, Md. Fairchild is engaged in aerospace, manufacturing of aircraft and parts for the military and private sector, electronics, domestic satellite communications, real estate development and radio broadcasting.; Table 2, BUNKER RAMO CORP. Oak Brook, Ill. Bunker Ramo is engaged in the development, manufacture and sales of electrical and electronic components, electronic information systems and knitted deep-pile fabrics.