Bendix Corp. disclosed yesterday it is considering selling some or all of Martin Marietta's non-aerospace divisions if it gains control of the Bethesda company.
The disclosure was contained in documents filed with the Securities and Exchange Commission as Bendix began its $1.5 billion offer for Martin Marietta.
Martin Marietta yesterday scheduled a board of directors meeting for Monday to decide what to do about the surprise takeover offer made Wednesday by Bendix Corp.
Securities analysts believe Martin Marietta will oppose the Bendix offer or attempt to force the Southfield, Mich.-based firm to raise its bid.
Bendix is offering to pay $43 per share in cash for 45 percent of Martin Marietta's shares and then to acquire the rest by exchanging 0.82 of a Bendix share for each remaining share of Martin Marietta.
In its formal offer to stockholders, Bendix revealed it has considered divesting one or more of Martin Marietta's non-aerospace divisions, which include aluminum, cement, chemicals and sand and gravel, if the merger goes through.
"The purchaser had conducted studies, on the basis of publicly available information, of alternative business strategies that it might consider under varying economic and market conditions in the event that it acquires all or substantially all of the equity interest in the company," the offer filed with the SEC said.
"In this regard, the purchaser has analyzed the possibility of divesting one or more of the non-aerospace divisions of the company, but the purchaser has made no determination to pursue any such transaction and has no plan or proposal with respect thereto."
The statement confirmed speculation by analysts that Bendix might sell the non-aerospace operations, which account for 42 percent of Martin Marietta's business but are losing money this year because of the recession.
The filing also said Bendix had no discussions with Martin Marietta officials about the proposed merger before the offer was made. It reiterated Bendix Chairman William M. Agee's interest in meeting with Martin Marietta officials to discuss the proposal.
Martin Marietta officials have had almost nothing to say about the merger proposal since it was made Wednesday morning. In breaking their silence to announce the board meeting, they gave no indication of what the company's reaction would be to the unsolicited offer. The company said, however, that it would announce the result of the Monday board meeting "promptly thereafter." It did not disclose the time or location of the meeting.
The company said it had retained the investment banking firm of Kidder Peabody & Co. to help deal with Bendix' offer, and said Kidder Peabody and Martin Marietta's legal counsel would report to the board at Monday's meeting.
Analysts say Bendix's offer is underpriced, and predict that the company, which makes automotive parts, electronic equipment and machine tools, will have to raise its bid. Martin Marietta stock, which soared $6.12 Wednesday after the offer was announced, rose another $3 yesterday to $42.25. Bendix gained $1.12 to $51.12.
Analysts speculated that Martin Marietta could wage a stiff legal battle against the Bendix bid or might make an offer of its own for another company, to scare Bendix off or force it to raise the bid. The analysts said Martin Marietta could command a price as high as $60 a share.
Bendix already owns 4 1/2 percent of Martin Marietta, a total of 1.63 million shares, purchased since April at an average price of $27.05 a share, according to the SEC filing. No other shareholder owns that much.
Bendix Chairman Agee has said he wants to make the company a major defense contractor. By purchasing Martin Marietta, Bendix would vault from 40th place to ninth on the list of Pentagon suppliers, ranked by the dollar value of defense contracts in 1981.
The proposed merger would be the third-largest ever.