With financier T. Boone Pickens Jr. hot on its tail, Singer Co., has moved its corporate headquarters from Connecticut to New Jersey, apparently in an effort to thwart Pickens' takeover advances.
Singer, a maker of military electronics equipment, shifted about 20 top corporate officials to Montvale, N.J., from Stamford, Conn., earlier this week. Other executives and clerical personnel remained in Stamford, which is located about 40 miles from Montvale.
Singer officials would not say that the sudden, unannounced, move was prompted by Pickens' interest in the company. "You have to draw your own conclusions," said Thomas Elliott, a Singer spokesman, who said his commute to work had increased to an hour from about 20 minutes as a result of the move. Elliott added, "We moved our principal executive offices here so we could take advantage of all the New Jersey corporate laws."
The move appears to be in keeping with the latest fad in takeover defenses: using favorable state takeover laws to evade an unwanted suitor. In previous cases, however, companies have persuaded their home states to change the laws in their favor. Singer simply switched states.
Pickens said earlier this month that his Mesa Limited Partnership owned 4.4 percent of Singer and wanted to buy as much as 15 percent of the company. He was not available yesterday for comment.
New Jersey has one of the toughest takeover laws in the nation. For companies that are incorporated in the state and have headquarters there, the law prevents takeovers from going into effect for five years without approval from the board of the company being taken over.
"New Jersey does have a very firm takeover law for companies that are chartered and headquartered in New Jersey, and Singer is now both," said Phillip Brannon, an analyst at Merrill Lynch & Co. Singer has been incorporated in New Jersey since 1873.
Brannon said Singer's move could start a trend for companies that are incorporated in the handful of states -- including New York and Indiana -- with takeover laws like New Jersey's. The cost of a move, he said, is likely to be far cheaper than mounting a full-scale takeover defense, which can cost millions. "This business of just moving a few of your officers to a state that is responsive and wants to protect its companies ... will offer good defense at a lower cost," he said.
However, Vincent DiBlasi, a New York attorney who specializes in takeover law, said it was unlikely that corporate moves would become a regular takeover defense, because most have major investments in headquarters facilities and personnel bases in the states in which they have their headquarters. He said it was more likely that companies would lobby their state legislators for better takeover protection.
It's not clear how many companies would be able to take advantage of the tactic pioneered by Singer. Most major American companies are incorporated in Delaware, regardless of their headquarters location, and would have to get stockholder approval to switch their incorporation. Delaware laws are considered favorable to corporate managements, although they do not protect against takeovers as well as those of New Jersey, New York and other states.
There have been at least three cases recently in which state legislatures have passed stiff anti-takeover laws to protect local companies that were being pursued. Sir James Goldsmith dropped a bid to take over Goodyear Tire & Rubber Co. late last year after Ohio passed a law protecting the company, while a law change in Minnesota two months ago hampered Dart Group Corp.'s efforts to take over Dayton-Hudson Corp.
And Boeing Co., which also is being pursued by Pickens, got some help from the Washington legislature a few weeks ago -- even though the Seattle-based company is incorporated in Delaware.