Martin Marietta Corp. retaliated yesterday for Bendix Corp.'s hostile $1.5 billion takeover offer for the Bethesda aerospace company with its own $1.6 billion bid to buy Bendix.
There was no immediate comment from Bendix, a maker of auto parts, electronic equipment and machine tools based in Southfield, Mich. Bendix launched its surprise $43-a-share bid for Martin Marietta last Wednesday.
Martin Marietta announced its $75-a-share offer for slightly more than half of Bendix's 22.9 million shares after its board, in a special meeting in New York, unanimously rejected Bendix's takeover overtures and authorized lawsuits against Bendix, charging violation of federal securities laws.
Bendix stock closed on the New York Stock Exchange yesterday at $57, up $2.37; Martin Marietta stock, which did not trade yesterday, closed Friday at $41.
"Our board concluded that if these two corporations are going to be combined, the interests of shareholders will be best served by combining the two corporations on the terms contemplated by the Martin Marietta offer rather than the Bendix offer," Martin Marietta President Thomas G. Pownall said yesterday.
Under its offer, Martin Marietta would pay $75 a share for 11.9 million Bendix shares. It said it then plans to complete the merger by offering either 1 2/3 shares of common stock, or one share of a new issue of preferred stock with a market value of about $55, for each remaining Bendix share.
Measured by 1981 sales, Martin Marietta is smaller than Bendix, with sales of $3.3 billion to Bendix's $4.4 billion.
A combination of the two companies would create an entity whose 1981 sales of $7.7 billion would have ranked it 45th among the nation's industrial concerns. Primarily because of Martin Marietta's aerospace operations, the combined company would be one of the nation's 10 largest defense contractors, with additional interests in cement, aluminum, sand and gravel, chemicals and automobile and industrial equipment.
Securities analysts, who had considered Bendix's offer too low, had expected Martin Marietta to oppose Bendix's bid vigorously. The counteroffer should force Bendix either to increase its offer or to drop out, the analysts said yesterday.
"I see them looking at Bendix and saying, 'You want to fight, we'll fight,' " said one analyst, who asked not to be identified. "I think what we'll see is a very substantial counteroffer from Bendix."
"I think it's a clever move on Martin Marietta's part, not totally unexpected," said Thomas T. Taylor, an analyst at the securities firm of Legg Mason Wood Walker Inc. in Baltimore. "They did not want to be taken over by Bendix, obviously, and the most clear-cut way to defend themselves is to go after Bendix."
Taylor speculated that if Bendix does not raise its offer, "My guess is they might look for a way to graciously get out of the situation without losing too much face."
Pownall said the Martin Marietta board had rejected Bendix's offer because it was too low. "The timing of the Bendix takeover proposal is an attempt to buy Martin Marietta's stock at bargain prices," a Pownall statement said.
Bendix is offering $43 a share for 45 percent of Martin Marietta and then is proposing to complete the deal by swapping 0.82 percent of a Bendix share for each remaining Martin Marietta share.
Pownall also contended that if Bendix took over Martin Marietta, it could weaken the company's defense business. "We believe it would be harmful for Martin Marietta's aerospace business to pass into the hands of a management lacking deep experience and continuity in the major systems business," he said. Martin Marietta's big contracts include the MX missile, the Titan III booster rocket and the space shuttle.
Bendix, flush with cash as the result of divesting its natural resources interests two years ago, has made no secret of its desire to purchase a high technology or defense company. Its chairman, William Agee, has been trying to steer the company into high technology from its industrial origins.
Analysts said Bendix's supply of cash -- estimated to be $500 million -- could help Martin Marietta finance its proposed acquisition of the company. If successful in its takeover bid, Martin Marietta could pay part of the costs of the takeover from Bendix's coffers.
"They would get a lot of that cash back," said Taylor, who said that Martin Marietta would have little trouble financing the proposed purchase.
But other analysts weren't so sure yesterday, saying that Martin Marietta might have to sell part of Bendix's assets or some of its own subsidiaries to pay for the deal. Bendix had hinted last week it might sell part of Martin Marietta if its takeover proposal went through.
"If they [Martin Marietta] end up with Bendix, then I would think anything outside of the aerospace business would be up for sale," one analyst said.