Olympia Brewing Co. yesterday abruptly dropped out of an agreement to merge with Pabst Brewing Co. because of Pabst's difficulties in arranging financing for the deal. But an Olympia spokesman said the merger proposal probably would be revived in another form.
"The merger will go forward, but in a slightly different version," Olympia spokesman Robert Sundmacher said from the brewer's headquarters in Tumwater, Wash. "As of today, we're still independent companies."
The companies said they were considering alternatives to completing the merger and indicated that they would make an announcement later this week.
Under the terms of the original merger agreement, announced June 10, Pabst and Olympia were to purchase 49 percent of each other as the first step in the transaction. Pabst already has purchased the shares, but Olympia has not yet actually paid for the 4 million Pabst shares it planned to purchase, and Sundmacher said the company would now return the shares tendered, or promised, to it.
Sundmacher said the snag in the merger plans developed over Pabst's "inability to reach definitive tender-offer financing agreements with its banks." He said the financing difficulties occurred after a federal judge in Delaware last week raised questions about whether the 4 million shares being purchased by Olympia would be voting or nonvoting shares. Pabst officials said last week they expected the objections to be solved easily.
However, Sundmacher said, "The banks felt that, in view of that reservation, that it raised some questions about the nature of the merger."
Industry analysts said the Pabst-Olympia merger agreement deliberately was made complicated to block a bid by dissident Pabst stockholder Irwin Jacobs to purchase Pabst and then sell a major part of the company to rival brewer G. Heileman and Sons Inc. Jacobs dropped that bid Friday after the Justice Department said it would oppose the Jacobs plan on antitrust grounds. Jacobs, however, has vowed to continue to try to gain control of Pabst.