Glazer bids for Allied Research Businessman offers $16.50 a share

April 13, 1993|By Ted Shelsby | Ted Shelsby,Staff Writer

Malcolm I. Glazer, the Palm Beach, Fla., businessman who heads one of the three groups vying for a National Football League franchise in Baltimore, has made a preliminary offer to buy Allied Research Corp., a city-based munitions company, for $16.50 a share.

Allied, which supplies ammunition primarily to Middle East countries, announced yesterday that the approximately $75 million offer was made in an unsolicited letter received Friday. The letter stipulated that the proposed transaction would be subject to the endorsement and support of Allied's board.

Trading of Allied Research shares on the American Stock Exchange was delayed yesterday until after the company's announcement. Shares opened at $15, up $1.875 from its close on Thursday, and closed at $14.75, up $1.625 for the day.

Mr. Glazer, of the privately held First Allied Corp., has accumulated about 9 percent of the 4.53 million Allied Research shares outstanding.

Mr. Glazer met yesterday with Allied executives in Baltimore. Afterward, Reinald W. Carter, Allied Research's acting chairman and chief executive, said that he had passed the offer on to the company's board of directors and that they were evaluating it.

Allied said it has retained the New York investment banking firm of Ladenburg, Thalmann & Co. Inc. to serve as its financial adviser.

Joel Glazer, Malcolm Glazer's son and a partner in the football venture, said a purchase of Allied would not affect the family's football initiative. "There's no question about it," said Joel Glazer, "we're fully committed to football in Baltimore."

He declined, however, to discuss the proposed acquisition, and other First Allied officials could not be reached for comment.

Allied also said yesterday that it would continue with plans to buy back 350,000 shares of its common stock owned by Saudi Arabian investor Kusai H. M. Al Azzawi. The sale, scheduled for completion April 30, would reduce Mr. Al Azzawi's holding from 15 percent to about 7 percent.

Richard Farrell, a spokesman for Allied, said these shares would be used for an employee benefit plan, such as stock options, or possibly to make an acquisition of its own.

Pentagon sales accounted for less than 10 percent of Allied's munitions business last year and proposed cuts in the U.S. defense budget are not expected to have a major impact. Most of its sales are to what the company calls "friendly Middle East and Asia countries."

Mr. Carter resigned in December as Allied's top executive after guiding the company through a period of rapid growth. Now a consultant to Allied, he is filling in for his successor, Jay R. Sculley, who is recovering from surgery.

Under Mr. Carter's guidance, the company, whose manufacturing operations are in Europe, went from a deficit operation with sales of $45 million in 1990 to a thriving business with sales of $217 million last year and a profit of $18 million.

During an interview with The Sun last year, Malcolm Glazer said his diverse financial holdings included mobile-home parks and nursing homes in several states, a TV station in Laredo, Texas, and half of a bank in Savannah, N.Y.

He has become known as a minor player on Wall Street, buying and selling big chunks of companies he believes were undervalued. A hostile takeover bid for Formica Corp. in 1988 failed, but Mr. Glazer took home a substantial profit when he sold his 10 percent share.

In 1989, he tried to buy Harley-Davidson Inc. Although the motorcycle maker rebuffed him and the plan fell through, Mr. Glazer sold his stake for a quick profit of roughly $11 million.

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