Three years after escaping a hostile takeover attempt and less than a year after moving its headquarters to Fairfax County, Mohasco Corp., one of the largest companies in the home furnishings business, is on the run again.
Mohasco is being pursued by an unsolicited bidder, Nortek Inc. of Providence, R.I., a manufacturer and marketer of commercial and residential building products, electrical sheathing and aircraft fasteners.
Nortek yesterday filed documents with the Securities and Exchange Commission announcing that it has acquired 972,850 shares of Mohasco, about 7 percent of the furniture company's 14.1 million shares of outstanding common stock, for $20.8 million.
Nortek bought its shares "with a view to acquiring a significant equity interest in" Mohasco, or acquiring the company outright "subject to future developments," company officials said in their SEC filing. The company said it has a $290 million line of credit that it could use to help finance a takeover of Mohasco. Nortek may also seek a seat on Mohasco's board of directors, according to the SEC filing.
In a terse statement, Mohasco officials said yesterday that "The Nortek investment was unsolicited and made without notice to Mohasco." Nortek officials had no comment.
Mohasco stock closed yesterday at $25 a share, up $2.50.
Nortek's takeover bid comes as Mohasco is recovering from declining sales and the effects of a brutal 1985 takeover attempt launched by a Miami-based investor group, Columbia Enterprises Inc.
Mohasco spent $23.6 million to regain its independence from Columbia, repurchasing all 821,000 shares of stock owned by the investor group -- at a cost of $28.75 a share. Columbia agreed to limit its Mohasco holdings to 3 percent of outstanding stock for 10 years.
To recoup those costs and gain a more competitive footing in the furniture and carpet industries, Mohasco began an aggressive cost-cutting campaign, closing plants and laying off workers and, finally, after years of being urged to do so by its financial advisers, moving its headquarters from Amsterdam, N.Y., to an area closer to its southern markets.
Mohasco, known for its Mohawk carpets, had earnings of $15.8 million ($1.67 a share) in 1986, a 7.6 percent drop from the $17.1 million ($1.69) in 1985 profits.
Incentives were offered to help finance Mohasco's move to the Fair Lakes development near the junction of I-66 and Rte. 50 in Fairfax. The county agreed to let Mohasco have up to $7 million in county-backed loans to help build a company office complex.