Looks like a bum deal for shareholders. This was no TAKEOVER but really a TAKEUNDER! Hope a competing bid arises!
Sept. 4, 1997, Kimberly-Clark Corp. (KMB) said it signed a definitive agreement to acquire Tecnol Medical Products Inc.
(TCNL) for about $400,000,000 in stock, based on the closing price of KMB's common on September 3 and "after adjusting
for Tecnol's debt and cash."
Under the agreement, KMB said it would exchange 0.42 of a common share, or up to 8,900,000 shares, for each of TCNL's
21,300,000 fully diluted common shares outstanding. KMB said it currently has 551,700,000 common shares outstanding.
As part of the agreement, KMB also got an option to acquire up to 19.9% of TCNL's shares outstanding at $22 per share if it
does not complete the acquisition "under certain conditions involving a competing proposal."
Van Hubbard, chairman, president and chief executive officer of TCNL, and Kirk Brunson, its vice chairman and executive
vice president, who own a total of about 20% of the company's shares, agreed to vote for the acquisition. Following the
completion of the transaction Mr. Van Hubbard would become a consultant to the combined company.
KMB said it expects to complete the transaction, which would be tax free to TCNL shareholders, in late 1997, subject to
approval by TCNL shareholders, among other things.
The company also noted that the combined entity is expected to reduce expenses and increase efficiency by eliminating
redundant overhead costs, consolidating workforces and streamlining manufacturing facilities. To cover the costs of
implementing these plans, KMB said it will take a one-time charge in an amount to be determined in the quarter the transaction
is completed.
KMB also said its board authorized the repurchase of up to another 20,000,000 of its common shares from time to time. KMB
said it repurchased 13,400,000 common shares to date under a previous authorization. |
