TWO WAYS TO GET PUMPED UP
No matter how it ends, the quest for Commercial Intertech (TEC) may yield a win-win situation for some risk players. Intertech is trying to thwart a June 27 hostile takeover bid from United Dominion Industries, which on July 25 increased its offer from 27 to 30 a share.
Intertech, a maker of hydraulic components, building products, and fluid-purification systems, escalated the fight on July 29 by announcing the spinoff of its profitable Cuno unit to stockholders. Each shareholder will receive one new-ly minted Cuno share for each share of Intertech held as of Aug. 9. Cuno will soon apply to trade on Nasdaq. Intertech's stock rose to 29 1/2 after Dominion made its initial offer--then slumped to 26 when the bid was rejected.
Analysts expect Dominion to mount a legal challenge to the proposed spin-off. Even so, some pros argue that Intertech is still a good buy. Why? Intertech's Cuno, which also makes fluid-purification systems, is worth $200 million, or 14 1/2 a share based on 13.7 million shares, according to one investment banker. He feels that Cuno's worth could double in a year or so, whether or not the spin-off happens. Dominion may opt to raise its offer for Intertech, especially if its real target is the Cuno operations, says this pro.
BY GENE G. MARCIAL
Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.