Pargas Inc., which earlier this year appeared to be the possible target of a takeover attempt by the Belzberg family of Canada, has agreed to be acquired by a New York investment firm.
Forstmann Little & Co. of New York, a closely held firm, and Pargas, the Waldorf, Md., marketer of liquefied petroleum gas, said they have agreed in principle to the acquisition of Pargas' approximately 4.1 million outstanding shares of stock for $173.2 million in cash.
Pargas shareholders would receive $42.24 for each Pargas share under the agreement, which is expected to be completed within two weeks. The price is substantially higher than what Pargas traded at last year. As recently as September, the stock was selling at $15.75, and it finished the year at a high of $28.
The transaction depends upon completion of financing, a review of Pargas properties and receipt by Pargas of "a fairness opinion concerning the transaction" from Pargas' investment banking firm, Kidder-Peabody & Co.
Last month, Pargas retained Kidder-Peabody to investigate the possibility of selling the company. That followed disclosure by a Belzberg-controlled firm that it had acquired 9.9 percent of Pargas' stock and was interested in taking over the company.
Subsequently, a group of investors led by Ivan F. Boesky Corp. acquired 7.3 percent of Pargas' outstanding common stock. The Belzberg acquisition was at an average price of about $26 a share, while the Boesky group paid as much as $36.50 for some of its shares.
Forstmann Little & Co. was the buyer recommended by Kidder-Peabody, which had been charged to find a deal "taking into consideration the best interest of Pargas shareholders, employes and management."
"This all originated back in January," said Pargas President N. L. Langley. When management received word of the Belzbergs' interest, the Pargas board "felt that now was the proper time for our investment banking firm to see what they thought was the future for Pargas," he said.
Langley said that the firm is expected to be acquired by a holding company formed by Forstmann Little & Co. in which some senior management would participate as equity investors. He also said he expected the firm's management to remain the same.