Symbol <SBL.N> hostile for Telxon unlikely -source
By Brendan Intindola
NEW YORK, June 2 (Reuters) - Symbol Technologies Inc. is "highly unlikely" to take its takeover bid for Telxon Corp. <TLXN.O> directly to shareholders in a hostile tender that would circumvent Telxon management, a source close to Symbol said Tuesday.
Telxon has rejected two acquisition offers from Symbol.
Based on about 16 million Telxon shares outstanding at the end of 1997, the equity value of the $42-per-share offer is around $672 million.
In late afternoon Nasdaq trade, Telxon shares were off 3-1/8 to 29-7/8, up from an earlier low of 28-5/8. The stock's 52-week high is 37-1/4 and the low 16-7/8.
Meanwhile, shares in Holtsville, N.Y.-based Symbol were off 3/8 to 34-1/2.
"I think it's over," said an arbitrageur who asked not to be named.
"This buyer never demonstrated from the outset that he was willing to go hostile, and was adamant about wanting a negotiated transaction. I think he meant it here," he said.
"Similarly, the seller has demonstrated an extreme amount of intransigence. At the same time I am sure that in their investor base there are going to be people who are not thrilled with the situation," the arb added.
Symbol, a leader in bar code-driven systems, said its sweetened proposal would expire at noon on June 8. Telxon makes wireless and mobile transaction-based systems.
Three weeks ago, Telxon's chief executive Frank Brick told Reuters that Symbol's $38-per-share offer was "clearly inadequate" and represented a level of equity valuation Telxon could reach independently.
Jerome Swartz, chairman and chief executive of Symbol, said Tuesday in a statement the most recent offer is Symbol's "best and final proposal."
"Our price is 40 times Telxon's current earnings and substantially higher than Telxon shares have ever traded," Swartz said. "It's time for Telxon to negotiate a merger agreement or explain to shareholders why it apparently intends to allow Symbol's compelling proposal to expire."
Symbol said the deal could have been easily completed. Several banks have indicated their willingness to finance the deal, there were no significant regulatory issues, and the deal would have been significantly accretive to earnings, excluding one-time charges, it said.
15:50 06-02-98
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