American Standard Rejects $4 Billion Takeover Bid
An unsolicited buy-out offer made in December by Tyco International Ltd. was rebuffed by American Standard on the grounds that the company prefers to remain independent. The $4 billion overture was revealed by the Wall Street Journal in January, when the paper acquired a letter dated Dec. 5 detailing the proposal made by L. Dennis Kozlowski, chairman and CEO of Tyco, manufacturers of fire controls, security systems, plumbing and other products, to Emmanuel A. Kampouris, chairman and CEO of American Standard, makers of plumbing products, Trane air-conditioning systems and auto brakes.
Shortly after the letter on Dec. 17, American Standard disclosed an accord with its biggest shareholder, the New York leveraged buyout firm Kelso & Co., to sell its 27 percent stake, roughly 21 million shares, in the company. Kelso engineered the 1988 buy-out of American Standard, which left the company with a $2 billion debt. Observers view the move as a preventative measure to make the company less susceptible to a takeover by getting rid of one of the larger shareholders.
“We are not interested in hostile activity, “ Kozlowski told the Wall Street Journal, “ and we see plenty of opportunity elsewhere. If for any reason American Standard wants to discuss this, we of course would be willing to talk.” Both companies have stated that the matter is closed.