Chicago Pneumatic Tool Co. is based in New York. A headline in yesterday's Business section incorrectly said it is an Illinois company.

While many of the nation's best-known corporate raiders are busy managing companies they acquired last year, Washington's Rales brothers continue to launch new hostile takeover bids.

Steven and Mitchell Rales are leading a group that has made an unsolicited $38-a-share, $163 million offer for the shares of Chicago Pneumatic Tool Co., a manufacturer of industrial machinery based in New York. One Wall Street analyst said that the Rales brothers, who manage a portfolio of real estate and other investments, have their eye on Chicago Pneumatic's valuable Manhattan headquarters, in addition to real estate that goes along with the company's manufacturing operations.

But Steven Rales said yesterday that his investor group is interested in acquiring Chicago Pneumatic for more fundamental reasons.

"The company has outstanding brand names, excellent channels of distribution and high-quality products," Rales said. "But in my opinion, the company's earnings performance doesn't indicate that the present management is realizing the maximum value for shareholders . Our $38-a-share offer is the highest price shareholders have seen since the early 1970s."

In the first nine months of 1985, Chicago Pneumatic had revenue of $308.8 million and net income of $4.8 million ($1.07 a share) compared with revenue of $311.1 million and net income of $12.4 million ($2.49) in the same period of 1984. Chicago Pneumatic is the defendant in a lawsuit filed by the Rales last week, which charges that the company's board of directors illegally transferred 1 million shares of stock to an Employe Stock Ownership Plan as an antitakeover device.

Chicago Pneumatic transferred stock to the ESOP to give its president, Thomas P. Latimer, the power to block any unsolicited takeover bid, according to a lawsuit filed in the U.S. District Court for the Southern District of New York. As sole trustee for the ESOP, Latimer's control over the ESOP shares has "put existing management in a position to entrench themselves fully and frustrate the ability of remaining shareholders to enjoy the benefits of any premium tender offer which may be extended to them."

Although the company has a variety of other antitakeover devices, it transferred the shares to the ESOP earlier this month to "frustrate" the Rales bid, says the lawsuit, which also criticizes Latimer's compensation.

"Just last month, Chicago Pneumatic announced that it was eliminating the payment of its dividend which had been scheduled for this month. Management compensation is a different matter. In 1984, the most recent period for which information is available, defendant Latimer received compensation of at least $480,000," the lawsuit says.

The lawsuit seeks to nullify the transfers of shares to the ESOP. Rales said yesterday that he believes that Chicago Pneumatic's board of directors has the power, if it chooses, to rescind antitakeover provisions and "act on behalf of the shareholders." Chicago Pneumatic officials declined to comment.

The Rales offer is being made through a subsidiary of Danaher Corp. Danaher is a publicly held real estate, replacement tire, and industrial products company. Danaher has $88 million in cash, a commitment from a British bank, National Westminster, to provide at least $40 million and possibly as much as $88 million, and at least $16 million from a group of investors known as West Limited Partnership.

About 39 percent of Danaher is owned by Equity Group Holdings, a District of Columbia general partnership controlled by the Rales brothers. Equity recently purchased control of Baltimore's Easco Corp., a company that makes hand tools and other industrial products.

The Rales' tender offer is conditioned upon either the final entry of a permanent injunction against ESOP transfer or Chicago Pneumatics' recission of the stock transfer.

The Rales' offer, which will remain open until April 15, also is conditioned upon the offering of at least 2.8 million Chicago Pneumatic shares to the Rales group by Chicago Pneumatic stockholders. The Rales already control 517,800 Chicago Pneumatic shares. There were 4.3 million shares outstanding prior to the transfer of 1 million shares to the ESOP.

Chicago Pneumatic stock closed yesterday at $37.25, down 25 cents.