Equity Group Holdings, a District-based private partnership engaged in real estate and manufacturing operations, has made an offer to acquire the Baltimore-based Easco Corp. through a cash merger transaction in which Easco shareholders would receive $18.50 a share.

Easco, a toolmaker and metals producer, has about 9.2 million outstanding shares, including two convertible bond issues, so the acquisition price would be about $171.5 million.

Steven M. Rales and Mitchell P. Rales, the sole partners in Equity Group, now own about 15.8 percent of Easco's outstanding shares, which they acquired over the last four months. Equity Group wants to acquire Easco's remaining outstanding stock in a cash merger with a company to be formed by Equity Group.

Easco sustained considerable losses last year. The company announced last month that it was planning to raise about $25 million by selling convertible bonds, most of which would be used by the company to repay short-term bank debt.

Easco's aluminum business earned a profit last year, but the company lost money in its industrial gratings and hand-tool operations. "The massive modernization of their hand-tool plant facilities has proved to be costly and rigorous," said Ernest Kiehne, senior vice president of Legg Mason Wood Walker Inc., a local securities firm.

For the nine months ending Sept. 30, Easco reported a net loss of $6.1 million (90 cents) on revenue of $412.3 million, compared with a net income of $7.7 million ($1.27) on revenue of $365 million in the same period last year.

Kiehne said, however, that Easco has "excellent value" and will be an extremely valuable company over the long-term.

The Equity Group proposal to acquire Easco is tentative and subject to Equity's ability to raise the necessary financing, an Easco official said. The Easco board of directors will consider the acquisition proposal at a meeting Jan. 9.

Neither company would comment on the proposed merger.

In a Jan. 4 letter to Easco's board of directors, Steven Rales said the proposed offering price was "a substantial premium above recent market prices and book value per share . . . and was attractive to your Easco's shareholders." Rales also said the merger proposal would expire on Jan. 21 if it is not accepted by the Easco board.

According to a Securities and Exchange Commission filing, between Dec. 31 and Jan. 4, Equity purchased 65,000 Easco shares on the open market for prices ranging from $16.25 to $16.87 per share. These purchases increased Equity's total stake in Easco to 1,124,900 common shares, or 15.8 percent of the tool manufacturer's outstanding shares.

Equity Group also holds about 39 percent of the stock in Danaher Corp., a West Palm Beach, Fla., company with manufacturing and real estate interests. Danaher, which originally was named DMG Inc., acquired Mohawk Rubber Company and Master Shield Inc., both privately held companies, in September.

Ohio-based Mohawk makes replacement tires and industrial products. Master Shield Inc., located in Texas, manufactures residential vinyl siding and accessory products.