Bendix Corp. made a secret offer to buy Martin Marietta Corp. for $55 a share a week ago, but Marietta spurned the effort to settle the tangled takeover fight, Bendix Chairman William Agee disclosed today. [Related story, page G1]
Marietta not only refused to consider the bid, which was $7 a share higher than Bendix's previous offer, but left Agee waiting in a Bethesda hotel for 4 1/2 hours, Agee said in an interview.
"I can only conclude their motives were to remain independent at any cost," said Agee. "I did everything humanly possible" to come to terms with Marietta, he added. "I kept saying, 'what is it you guys want?' "
Agee's final offer called for Bendix to acquire Marietta through an exchange of securities. When Marietta refused and went ahead with its own plan to buy controlling interest in Bendix, Allied Corp. stepped in and agreed to buy Bendix.
Allied's intervention in the Bendix-Marietta confrontation succeeded in "saving these two companies from possible disaster," Allied Chairman Edward L. Hennessy Jr. told a news conference.
"The spectacle of two large companies trying to swallow each other up is not very pretty, it's a situation potentially very damaging to the companies themselves, their employes, their stockholders and their customers," Hennessy said.
Hennessy said Agee, who started the tumultuous takeover fight, "probably received some bad advice," but he did not fault Agee for trying to buy Martin Marietta. "I think his strategy of putting the two firms together was an excellent strategy," Hennessy said. Praising Martin Marietta as a company whose "earnings outlook is absolutely excellent," Hennessy said he will help revitalize Marietta, which was forced to borrow millions of dollars to buy its independence.
Allied will emerge from the 31-day fight owning Bendix and as the largest shareholder of Martin Marietta, a Bethesda conglomerate and the biggest company based in the Washington area. The total cost to Allied is $1.9 billion.
If Bendix and Marietta had been left to try to buy each other, both companies would have gone deeply into debt and would have been trapped in a long, costly court battle. As it is, Marietta will be left in weakened financial condition, and Hennessy said Allied will do "everything we can to help them." Two as yet unidentified Allied officials will join the Martin Marietta board of directors.
Hennessy said his firm's purchase of Bendix "can help competition, make us lower-cost producers and enable us to compete in world markets."
His remarks came the day after an agreement was announced ending the battle that began when Bendix bid for Martin Marietta.
Agee will become president of Allied, join its board, and will be charged with managing Bendix operations and "assisting us in putting the two companies together," Hennessy said.
He said Martin Marietta's debt will be 70 to 80 percent of its total capital, more than three times the debt for a healthy company such as Allied, and that the skirmish "might have a depressing impact on their stock."
Hennessy said Allied considered acquiring either Bendix or Marietta before the struggle began and found both "sort of had the same goals we have."