ST. PETERSBURG - Milton Roy Co. said it repurchased for $8.2-million the shares held by hostile suitor Crane Co., apparently ending a brewing takeover battle for the Pinellas maker of metering pumps. Milton Roy bought the 488,300 shares, representing 8.4 percent of its common shares outstanding, from Crane on Friday for $16.75 each, the opening market price that day on the New York Stock Exchange.
The repurchase came three days after Milton Roy sued Crane, alleging an illegal "greenmail" scheme to manipulate the market for its stock. John M. McNamara, Milton Roy's vice president for finance, said Crane called last Friday morning to say it was interested in selling. McNamara said Crane may have reassessed its situation in light of the federal suit.
Florida takeover law also makes it more difficult for hostile suitors. Last June, Gov. Bob Martinez signed a bill that gives Florida-based corporations new breathing room in the face of potential hostile takeovers. The law allows targeted corporations to consider the impact on community, employees, shareholders, suppliers and customers, instead of merely looking at the highest conceivable profit.
Harry G. Katica, a stock analyst for Raymond James & Associates Inc. in St. Petersburg, said it appears Crane found too formidable barriers to buying the company against management's wishes, including certain Florida laws and a Milton Roy "poison pill."
"It looks like they were happy to get out," said Katica.
In Florida, the law on takeovers is "incredibly complex without the concurrence of management," said Richard M. Leisner, a securities lawyer with the Tampa firm of Trenam Simmons Kemker Scharf Barkin Frye & O'Neill.
The law aside, Leisner said, a properly written anti-takeover measure is defense enough.
"A company with a good pill doesn't get anything special out of Florida law," Leisner said. "What a pill says is, 'Wait a minute. You won't get the deal done so quickly."' Milton Roy's poison pill stock purchase plan makes it onerous to acquire more than 15 percent of the company's common shares outstanding without management's blessing. If activated by Milton Roy's directors, the provision would allow the company to dramatically dilute any raider's holdings by issuing more shares.
Crane had indicated in letters to Milton Roy chairman and president Richard E. Schmidt it was interested in buying the shares it did not own for $21 each, although the New York-based company never made a formal bid.
In an announcement Monday, Milton Roy chairman and president Richard E. Schmidt said, "We are pleased to be able to repurchase these shares at an attractive price relative to the excellent future prospects of the company."
Added McNamara, "Getting Crane out of the picture helps the company run its business."
Milton Roy shares closed Monday at $15.50, down $1, in composite trading on the New York Stock Exchange.
Crane was paid at least what it had invested, but hardly made a killing. McNamara said that factoring in costs associated with the transactions, "I'd be surprised if they made anything at all."
In October, Crane said it owned 504,200 shares of Milton Roy, most of which were acquired during the previous month at between $15.50 and $16.75 a share. Crane disclosed last month it had just sold 15,900 of the shares at a tidier profit, between $19 and $19.37 1/2 a share.
Crane chairman Robert S. Evans has not returned telephone calls since the start of the takeover fight, and did not call back Monday.
St. Petersburg-based Milton Roy makes analytical instruments and process-control products such as metering pumps. The Crane Co. is a diversified manufacturer of defense, building and industrial products, including process-control equipment.
No pot of gold for Crane Co. Milton Roy Co.'s stock price has fluctuated little since Crane Co. acquired and then sold an interest in the company. The price never soared, as is often the case amid takeover talk.
October: Crane Co. acquires 504,200 shares - or an 8.9 percent stake - for between $15.50 and $16.75 a share.
January: Crane sells 15,900 of the shares for between $19 and $19.37 1/2 a share.
Monday: Milton Roy announces it bought back on Friday the remaining 488,300 shares of its stock for $16.75 each. By the end of trading Monday, the stock has dropped $1, to $15.50 a share.