Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Businessweek Archives

Is Fairchild In The Catbird Seat?


Inside Wall Street

IS FAIRCHILD IN THE CATBIRD SEAT?

After languishing for some time at around $5 a share, Fairchild got a badly needed boost in early February when a British group made an unsolicited $14-a-share bid for the diversified aerospace-products company, formerly known as Banner Industries. Within days, Fairchild's stock jumped from 7 3/4 to 10 1/4. But in less than a month, Fairchild had broken off talks with London's Mountleigh Group, and the stock fell as low as 7 by mid-April.

Recently, however, the stock has started to pick up again, rising to 8 5/8, in part because of rumors that a bid from another suitor is imminent. Fairchild Chairman and CEO Jeff Steiner has been buying shares since rejecting the Mountleigh bid, and he has now accumulated a 44.5% stake.

One New York money manager says the aborted Mountleigh deal has called attention to Fairchild as takeover bait and says the company is grossly undervalued. Fairchild has three core units: The aerospace division makes fasteners for aircraft manufacturers and airlines; the D-M-E division produces tooling and electronic control systems for the plastics-molding industry; and the communications unit provides centralized telecommunications for commercial buildings.

Fairchild also has a 47.2% stake in Banner Aerospace, a distributor of replacement parts for the aviation industry, and a 40% interest in Rexnord, a maker of power-transmission components. Together, says the pro, Fairchild's assets are worth $385 million, net of debt, or a cool $22 a share. In a takeover, of course, the company would be worth even more. A Fairchild spokesperson says the board will consider any bona fide bid, but the company's immediate objective is rapid growth, cost-cutting, and reduction of its $360 million debt.GENE G. MARCIAL


LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus