Pulaski Funiture Corp., a furniture manufacturer in Pulaski, Va., has received unanimous approval from the directors of Gravely Furniture Co. Inc. to acquire the Ridgeway, Va., grandfather-clock maker for about $9.4 million.
Pulaski, raising an earlier bid, beat an offer by a Gravely management group that had proposed forming an employe stock ownership plan (ESOP) to take control of the company.
Combined, the firms would generate annual revenue of about $90 million from four plants and employ 1,850 people. Pulaski President Bernard C. Wampler said he doesn't plan any changes in Gravely's management.
After signing the merger agreement with Gravely's board today, Pulaski tomorrow will begin buying up to 55 percent of the outstanding Gravely stock for $19.50 per share for a period of 20 business days. Thereafter, Gravely will merge with a subsidiary of Pulaski, with each of the remaining outstanding shares being converted into 0.7115 share of Pulaski common stock. Based on the closing price of Pulaski common stock on June 10, the offer has a $9,386,000 value. Pulaski stock closed Friday at $27, down 25 cents.
In order to "lock out" a bid by a third party, the Gravely board also gave Pulaski the option to purchase up to 200,000 shares of previously authorized but unissued common stock valued at $19.50 per share in exchange for Pulaski preferred stock with a value of at least $19.50 per share.
The Pulaski offer was higher than an offer tendered previously to the board of Gravely and was higher than a proposal presented earlier under the ESOP plan. The Gravely board proposed on May 30 to form the ESOP for the purpose of acquiring up to 90 percent of the outstanding Gravely stock at a price of $18.25 per share. H. Clay Gravely III, president and spokesman for the management group, said that the ESOP was not in a position to compete with the Pulaski offer.
Gravely stockholders who tender their shares in response to the original offer should expect to be paid for them within about 30 days after the offer begins, the company said. The merger is expected to be completed and the transaction closed in mid-August.
In the joint statement, Wampler and Harry C. Gravely, chairman of Gravely, expressed their confidence that the two companies will work well together, taking advantage of the potential economies of scale and the possibility for future expansion.
Lynchburg Foundry in Lynchburg, Va., announced another round of layoffs -- the third since February.
About 200 employes will be idled at the end of the week, said company spokeswoman Jan Tiennisson. She blamed the layoffs on declines in orders by key automotive customers.
"The layoffs are the result of weakening work schedules from the plant's customers, caused in part by vacation shutdowns, model changeovers and utilization of existing inventory," she said.
In February, the foundry cut 90 positions. Last month, 60 employes lost their jobs.
Total employment at the company's Lower Basin Plant is now 673, she said.