Martin Marietta Corp., facing a possible stalemate in its exchange of tender offers with Bendix Corp., is searching for an alternative merger partner and strengthening other defenses against a Bendix takeover.
The Bethesda company says it expects to have discussions with third parties who might be interested in making a counteroffer for Martin Marietta.
Martin Marietta also disclosed in a Securities and Exchange Commission filing that it has granted long-term employment contracts to 28 key officials that would force a takeover partner to make expensive severance payments to the executives.
There was a rumor yesterday on Wall Street that General Electric Co. might be interested in rescuing Martin Marietta from Bendix. Martin Marietta officials said they are not holding discussions with any possible suitors. A GE spokesman said it is the company's practice to neither confirm nor deny such rumors.
Meanwhile, the Department of Justice said it would review the Bendix and Martin Marietta offers for possible antitrust violations.
Bendix last week offered to buy Martin Marietta for $1.5 billion, and Martin Marietta replied Monday by offering to buy Bendix for $1.5 billion.
Analysts say it is possible that because of the way the offers are structured, each company could wind up with a 50 percent stake in the other, a stalemate that would likely have to be resolved in court.
One analyst suggested yesterday that Wall Street traders seem to favor Bendix's offer. Robert G. Maloney of Wood Gundy Inc. cited Martin Marietta's current stock price, which is closer to the Bendix offering price than Bendix's stock price is to Martin Marietta's offer. Martin Marietta closed at $39.87 yesterday, down 12 cents, while Bendix closed at $53, off $3.50. If traders thought the Martin Marietta offer had a better chance of succeeding, they would have pushed Bendix's stock price up by purchasing shares in anticipation of the merger, Maloney said.
The two companies won't know until the first phase of their offers expire how many shares of the other they have been able to buy. Bendix's deadline is Friday midnight, Martin Marietta's is midnight Sept. 9.
Martin Marietta could head off Bendix by striking a deal with another company at a price better than Bendix's offer of $43 a share, analysts say. "The thing that they have going for them is that Martin is a steal at $43 and it's easy to make a case to pay $50" or as much as $60 a share, said Thomas T. Taylor, an analyst at Legg Mason Wood Walker Inc., a Baltimore securities firm. "There are all sorts of people I think would have an interest in Martin."
Martin Marietta disclosed its interest in an alternative buyer in documents filed with the SEC. "The company expects to have discussions with third parties who the company believes may desire to acquire the company," the firm said.
The long-term contracts given to top Martin Marietta executives were seen by analysts as another defensive maneuver. Such contracts, known as "golden parachutes," have become a common ploy in takeover battles, although it is rare for so many executives to be protected. The contracts would force an acquirer to keep the officials on or make huge severance payments if they are fired.
Under the terms of the contracts, the officials would receive their current salaries and benefits through Aug. 30, 1985, with the exception of Chairman J. Donald Rauth, whose contract expires next Jan. 31. The contracts protect 17 corporate executives -- including the heads of each division -- 10 officers of the aerospace division and the top data processing person.
The Justice Department's announcement that it will review both merger proposals to see if they violate any antitrust laws came after days of negotiations with the Federal Trade Commission, which also wanted to conduct the normal antitrust review of the mergers.