Genstar parent resists LaFarge's hostile bid Redland PLC studies split into 4 divisions for separate sale

Takeovers

November 20, 1997|By Sean Somerville | Sean Somerville,SUN STAFF

Redland PLC, the parent company of Hunt Valley-based Redland Genstar Inc., is fighting a hostile takeover bid by LaFarge SA of France, Redland Genstar said yesterday.

Redland Genstar, which operates stone quarries, employs about 130 people at its Towson headquarters and more than 700 elsewhere throughout the state.

Jack Gease, director of real estate for Redland Genstar, said Redland PLC is preparing a proposal that would break the company into four divisions to be sold separately.

"Redland must show that [its plan] would net shareholders more than they would net from LaFarge," Gease said.

"LaFarge can then raise their offer or back out."

LaFarge, the world's second largest maker of cement, made an unsolicited $3.5 billion offer for Redland PLC on Oct. 13.

Redland, a producer of aggregates and roof tiles, has urged shareholders to reject the offer while it develops a counterproposal. The British-based company said the offer undervalues Redland's assets.

One of the four Redland PLC entities on the block include the company's holdings in North America, which consist of operations in Maryland, Colorado, Texas, New York, Ohio and Canada. The company would sell its operations in Britain and Asia as an entity. The other businesses for sale are operations in Germany and France.

Gease said confidentiality agreements prohibited him from identifying prospective buyers of the North American operations. But he said Redland has provided information to two large North American companies.

Redland Aggregates North America -- the name for Redland's operations -- includes stone quarries, sand and gravel operations, concrete and blacktop production and highway contracting.

In Maryland, the company operates quarries in Churchville, Cockeysville, Marriottsville, Frederick and Medford. Redland also has a sand operation in Chase. With additional operations in Rockville, Jessup, Landover, Hollywood and Crofton, Redland also produces concrete and blacktop in Maryland.

LaFarge has set an "acceptance date" of tomorrow for its offer. But Gease said Redland doesn't view it as a hard deadline. "This seems to be a moving date," he said.

Gease added that the company must explain to shareholders within the next couple of weeks why they should not accept LaFarge's offer.

In the 1980s, Redland Genstar produced 15 million tons of stone a year, but a downturn in the economy coupled with a decrease in money spent on highways and office buildings hurt the company. In 1990, the company employed about 1,700. Just last year, Redland Genstar reduced its work force by 65 employees and closed its concrete plant in White Marsh.

Pub Date: 11/20/97

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