Icahn offers $1.18 billion cash for E-II Holdings Inc. buyout

May 15, 1993|By Bloomberg Business News

MOUNT KISCO, N.Y. -- Financier Carl Icahn made a $1.18 billion cash buyout offer yesterday for E-II Holdings Inc., the maker of Samsonite luggage, McGregor menswear and Culligan water treatment equipment.

Mr. Icahn, the former owner of Trans World Airlines Inc., said he has the financing and is willing to put up a $50 million nonrefundable deposit.

Mr. Icahn previously has been snubbed in his attempt to buy the company by financing a competing reorganization plan. E-II has been operating under Chapter 11 protection since July 1992.

This time, creditors might take a second look.

"It is an attractive offer," said Rita Reid, a bond analyst at BDO Securities Corp. "The creditors committee has to consider it."

At face value, Mr. Icahn's offer beats out the recoveries that creditors are promised under E-II's own plan, Ms. Reid said.

Mr. Icahn is offering junior bondholders $740 cash for each $1,000 face amount of debt, compared with $590 in new debt securities and common stock the company is offering. To the senior noteholders, Mr. Icahn will pay $1,230 cash for each $1,000 face amount of notes, compared with $1,140 worth of cash, E-II common stock and new debt securities under the current plan.

Nevertheless, Mr. Icahn can't simply walk up and buy the company. U.S. Bankruptcy Judge Cornelius Blackshear must give Mr. Icahn permission to seek creditor support for his competing proposal. Judge Blackshear in the past has blocked him from filing a competing reorganization plan.

Another obstacle may be E-II creditor Apollo Advisers, headed by former Drexel Burnham Lambert investment banker Leon Black. Mr. Black, now E-II's largest creditor, would become E-II's largest stockholder under the plan. It's unlikely that he would become majority shareholder under the plan, though.

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