UNC Resources Inc., an Annapolis company with interests in telecommunications, aerospace and nuclear industries, made peace yesterday with a Houston investor who had loomed as a takeover threat for more than a year.
UNC announced that it had bought back 4.4 million shares, or roughly 20 percent of the stock outstanding, purchased by Maxxam Group Inc. and its chairman, Charles E. Hurwitz, a takeover specialist whose approaches to UNC the company has rejected consistently.
UNC has agreed to pay Hurwitz about $50 million in cash plus warrants for 3.5 million shares that will give Hurwitz an additional profit if the price of UNC stock rises above $13.50 a share. UNC stock yesterday closed at $11.75 a share, down 50 cents.
The agreement marks the second time in less than a week that UNC has reached a settlement with a major shareholder for the repurchase of stock. Last Thursday, the company announced it would arrange for the repurchase of the 8 million shares owned by Chevron Corp., the West Coast oil company that had invested in UNC as part of a legal settlement reached in 1984. UNC has agreed to buy back these shares or arrange for other investors to do so.
The combined undertakings "permit the company to pursue its strategic growth plan with greater certainty, free of questions stemming from the presence of large shareholders," UNC President and Chief Executive Officer Dan A. Colussy said in a statement.
The deal announced with Hurwitz yesterday, however, comes at a price for UNC, which has undergone a dramatic restructuring over the past two years. The company has shed a number of lines, including its unprofitable mining and milling operations, and made a number of major acquisitions with cash earned as part of a legal settlement with Gulf Oil Corp., which subsequently was purchased by Chevron.
UNC officials said that Hurwitz had paid on average $9.85 for each share he had purchased, for which he now will be paid $11.50. Although this price is less than the $12.25 figure at which the stock was trading the day before yesterday's transaction, Hurwitz also will get as part of the deal warrants to purchase the 3.5 million shares at an exercise price of $13.50, which was $1.75 above yesterday's closing price .
In return, Maxxam Group agreed that, for 10 years after the closing of the deal, it will not purchase any shares other than those allowed under the warrants, solicit proxies, or "otherwise seek to exercise control or influence over UNC," according to the UNC statement.
"I feel very confident that what we're doing is in both companies' interest," Colussy said in an interview. "He got out at a fair price, and we've been able to repurchase the shares.
"What this does is permit us to continue on our path unencumbered by two very large shareholders whose interests may be quite different from the rest of UNC's shareholders," added Colussy, who has revamped UNC's management in the last year. Colussy also said that he hopes the agreements will trigger investment in UNC by a number of institutional investors who have been holding back because of uncertainty over the intentions of Hurwitz and Chevron.
Maxxam officials were not available for comment yesterday, but a Hurwitz ally on Wall Street indicated that one reason he pulled back may have been last month's consummation of Maxxam's deal to buy Pacific Lumber, a timber and welding-products firm in San Francisco, for more than $800 million.
"You don't make a deal of the magnitude of Pacific Lumber all the time," said this source, who insisted on anonymity. "Hurwitz is a builder of value who wants to make certain that appropriate attention is paid to building value in Pacific Lumber."
Of Maxxam's UNC deal, he said, "It is clear that there will be profit. On the other hand, the cash price is less than the market." But referring to the warrants, he added, if UNC does well, that will benefit Maxxam.