Bunker Ramo Corp. rejected yesterday the $56.1 million takeover offer made last Friday by Fairchild Industries Inc. of Germantown.
In a statement issued form Bunker Ramo's headquarters in Oak Brook, Ill., the company said Fairchild's offer of $33 a share was too low, the 45 percent of Bunker stock that Fairchild asked to buy is too much and Fairchild's debts would be too big to make it a good merger partner.
Fairchild executives expressed "disappointment" over the rejection, disputed Bunker's description of Fairchild's financial health and indicated the bidding isn't over yet.
Fairchild already owns 20 percent of Bunker Ramo's stock but signed a pledge last January not to buy more without Bunker's permission. Last spring, Fairchild offered to buy additional Bunker stock at $28 a share, but immediately was rebuffed.
Adding $5 to the offer last week apparently didd little to sway Bunker Ramo's board of directors, which turned down the offer yesterday rather than wait for a regular board meeting later in the month.
The Bunker announcement called the new offer "inadequate" and noted that purchasing another 25 percent of its sotck would give Fairchild "virtual control" of the illinois firm.
The rejection letter riled Fairchild officials because it complainerd that "Fairchild is already heavily in debt and would have to borrow further to purchase additional shares of Bunker Ramo."
Bunker Ramo said additional borrowing by Fairchild "would impair the ability of the combined entity to finance further growth for Bunker Ramo."
Fairchild officials quickly denied that their company is overextended but acknowledged that they would have to borrow money to buy the Bunker Ramo stock.
Borrowing to finance acquisitions has come under criticism from Carter administration inflation-fighters recently and several large banks said yesterday they plan to limit acquisition loans.