More news on LWNG take-over:
Service Corp (SRV) seen set for Loewen takeover
By Robin Sidel
NEW YORK, Oct 1 (Reuter) - Service Corp International, North America's largest operator of funeral homes and
cemeteries, was expected late Tuesday to launch a hostile takeover of its chief rival Loewen Group Inc (LWN).
Service Corp's board of directors was set to meet Tuesday to consider its next step after Loewen last week rejected an
unsolicited stock offer of US$2.8 billion, or US$43 per share.
It was not immediately known what time the board meeting was slated to begin, but most industry experts expected an
announcement from the company after the stock market closed. "I think there will be a tender offer. Service Corp certainly
has been very tenacious and disciplined about these kinds of things in the past," said Lynn Detrick of Williams MacKay
Jordan & Co Inc.
Loewen (LWNG) shares, which rose Monday on Nasdaq on views Service Corp will sweeten the offer, gained another 3/8
to 42-1/4 in Tuesday trading. Service Corp stock fell 1/4 to 30.
Service Corp publicly disclosed its interest in Loewen on September 17. Loewen flatly rejected the unsolicited bid on
September 25, saying the offer was inadequate and it intends to stay independent. In recent days, industry analysts and
takeover traders have speculated that Service Corp may launch a bid as high as $48 per share.
"If you know that you're not going to have the board's endorsement, you sweeten (the offer) and take it to the shareholders,"
one takeover trader said.
Although a combined Service Corp-Loewen would hold only about 10 percent market share in the highly-fragmented North
American industry, antitrust issues already have emerged. Last week, Florida officials said they were investigating antitrust
implications associated with the Service Corp offer. Service Corp has acknowledged that it may have to divest some
properties if the deal were consummated.
Since Service Corp disclosed its interest, Loewen has announced two acquisitions as part of its strategy to expand market
share. Both companies have been aggressively buying small, privately-held industry players. Meanwhile, Loewen officials are
expected to be in New York on Wednesday to celebrate the listing of the company's shares on the New York Stock
Exchange where it will trade under the symbol LWN (LWN). The company announced in early September that it would
switch to NYSE from Nasdaq to reflect the company's growth.
Loewen shares also trade on the Toronto Stock Exchange and the Montreal Exchange.
Rtr 13:51 10-01-96 (Eastern Standard Time) |
