Allied Research accepts $87 million buyout offer

August 17, 1993|By David Conn | David Conn,Staff Writer Bloomberg Business News contributed to this article.

Defense manufacturer Allied Research Corp. ended months of speculation yesterday by accepting an $87.4 million buyout offer from Malcolm I. Glazer, a Florida investor and would-be Baltimore football magnate.

The $19-a-share deal is contingent on further financial examination by Mr. Glazer's investment company, First Allied Corp., which signed the merger agreement with Allied Research yesterday.

The deal also requires approval from the Federal Trade Commission, the Securities and Exchange Commission and Allied Research shareholders.

Both sides in the deal have Baltimore connections. Mr. Glazer heads one of the two investment groups vying for the right to own a National Football League expansion team if a franchise is awarded to Baltimore this fall. Allied Research was based in Baltimore until May, when it moved its five-person headquarters staff to Vienna, Va.

In April, Rochester, N.Y.-based First Allied offered $16.50 a share for Allied Research, which sells ammunition primarily to Middle Eastern countries and has operations in Illinois, Britain and Belgium.

Since that offer, Allied Research has kept mum about its deliberations, except to note at its annual meeting two months ago that theboard was considering a buyout proposal higher than the original $16.50 offer. Without naming the bidder, Allied Research's chairman and chief executive, Dr. J. R. Sculley, hinted that Mr. Glazer had sweetened his offer.

Yesterday, in a statement, Mr. Sculley said, "It is the opinion of the Allied Research board of directors that the offer of First Allied reflects full and fair value for Allied Research."

After the morning announcement, Allied Research shares traded high as $17.50 share. They fell back late in the day to close at $16.88, up $3.63 a share from Friday's closing price.

Mr. Glazer, 64, has numerous other holdings and is the largest shareholder in the oil-services company Zapata Corp., in which he owns a 32 percent stake.

Mr. Glazer also owns large stakes in Harley Davidson Corp., the Milwaukee motorcycle maker, and Formica Corp., a laminates maker in Wayne, N. J.

Mr. Glazer already owns 9.3 percent, or about 428,000 shares of Allied Research. The manufacturer has an agreement to buy 350,000 shares owned by Saudi Arabian investor Kusai H. M. Al Azzawi. That sale would leave Mr. Al Azzawi with more than 7 percent of Allied Research.

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