Bendix Corp. Chairman William Agee reportedly rejected a request by RCA Corp. that Bendix cease buying RCA stock, prompting the sharp verbal attack Monday on Agee by RCA Chairman Thornton Bradshaw, an informed source said yesterday.
Neither Bendix nor RCA would comment further yesterday on Agee's surprising acquisition of RCA stock. Bendix announced Monday that it has purchased somewhat more than 5 percent of RCA and indicated it might go as high as 9.9 percent. The news produced a sharp defensive reaction by RCA and wide-ranging speculation by Wall Street analysts about Bendix's motives.
Agee broke the news to Bradshaw at a 1:30 p.m. meeting Monday in New York City, assuring the RCA chairman that Bendix's overtures were "friendly." Agee said his company was merely investing in RCA, not preparing a takeover campaign or seeking enough leverage to influence RCA's policies.
Bradshaw invited Agee to prove it, according to a source close to RCA. If it is indeed a friendly purchase, Bradshaw reportedly said, Bendix should not add to its RCA holdings and declare in official filings with the Securities and Exchange Commission its intent to hold its position.
Any other action by Agee would be regarded as unfriendly, Bradshaw reportedly said.
Agee reportedly agreed to consider Bradshaw's proposal, then declined later on Monday, saying he was unwilling to restrict Bendix's future actions.
Several Wall Street analysts who follow Bendix said yesterday they assume Agee has no plans to make a move to control RCA.
"I'm taking Bendix at face value," said Katherine Stults, a senior analyst with Morgan Stanley & Co. RCA is a good bargain and "Agee has a terrific record in selling and buying assets at a good time," she said.
Agee has sold off Bendix's forest products and natural resources divisions before the recession devastated those businesses, building a $573-million fund of cash and short-term investments.
Some $75 million of that has been spent on RCA, analysts estimate, assuming Bendix bought about 5.5 percent of the outstanding stock at prices close to $19 a share.
Another analyst, who asked not to be identified, said that if Bendix increases its holdings to just below 10 percent now, it would be in easy striking distance of a 15 percent share later, which could be enough to give Agee significant influence over RCA's management.
Despite its poor recent performance--including an 83 percent drop in earnings to $54 million last year--RCA's future prospects look better than they have in nearly a decade, said Ben Rosen of Rosen Resarch in New York, an RCA specialist.
He and other analysts are impressed by Bradshaw's determination to focus the company tightly on its base in communications and electronics by selling off unrelated business such as the Hertz Corp. In the view of Rosen and other analysts, RCA is underpriced.