Carl Icahn announced today that he will bide his time until after Dan River Inc.'s board of directors meets here Tuesday to discuss a management proposal calling for the company's 12,000 employes to acquire its stock.
The plan puts the employes in the unique role of a "white knight," protecting management from an unfriendly tender offer by Icahn.
The New York investor has been immensely successful at getting companies to buy him out at a high price after threatening to buy enough stock to control the board.
The tentative proposal, which a Dan River spokesman emphasized is still being worked out, calls for salaried and hourly employes of the Danville, Va., textile firm to buy the company for $22.50 a share, or $130.5 million.
The company spokesman said that the employes would not be "required or permitted" to pay for the stock, but he added that details of financing the plan through bank loans remain sketchy.
The proposal marks the latest effort by management to ward off the Icahn group, which began acquiring stock in the company last summer. The Icahn group currently owns about 29 percent of the common stock.
An Icahn spokesman said today that the group is extending its current $18-a-share tender offer through Wednesday.
He said the group will decide what to do "after we've studied the proposal and seen what happens at the board meeting."
If the employe plan is approved, Icahn could sell out at an estimated average profit of about $5 a share. Alternatively, Icahn could try to force a higher price by raising his offer.
The tentative plan was devised by management in consultation with San Francisco-based Kelso & Co. Inc., a firm that specializes in devising employe stock-ownership plans.
Earlier this month, Dan River arranged to sell about 475,000 shares of its common stock, or 8 percent, to McDonough Co., a U. S. unit of the British textile firm Hanson Trust PLC. Hanson, which paid $18.50 per share, has not disclosed what it plans to do if the employe stock plan goes through.