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Once Again, The Focus Is On Ferro

Inside Wall Street


How often can a stock turn up as a takeover play? Often, in the case of Ferro, the worldwide maker of specialty materials, such as coatings, ceramics, and plastics. The company was a buyout target in 1988 and again in 1989, when Jon Huntsman, chairman of Huntsman Chemical, began accumulating shares, which helped send the stock to a high of 41. Then, Huntsman suddenly bailed out, and other big stakeholders followed suit. The stock fell as low as 17.

As late as August of this year, some big investors continued to cut their positions. The State of Wisconsin Investment Board slashed its ownership to under 5% from 6%. And Phil Frost, chairman of drugmaker Ivax, also cut his holding, to 6% from 8%.

But Ferro has rebounded since then, closing at 34 on Nov. 5 -- up from 26 in September. Why? Another round of takeover talk. One New York money manager is convinced that Ferro is a target. He says that Great Lakes Chemical, a major maker of specialty chemicals, is eyeing Ferro. This pro figures Ferro is worth $ 50 a share in a takeover deal, especially since third-quarter earnings came out strong, at 56~ a share, vs. 37~ a year ago and a $1.19 loss in the second quarter of 1991. "The fit between the products and operations of Great Lakes and Ferro is unusually good," he notes. A spokesman for Great Lakes, which owns 40% of Huntsman Chemical, says the company is always looking for opportunities but declined to comment on Ferro. A Ferro spokesman says Ferro's stock has been rising because of buy ratings by six brokerages. He declined comment on takeover rumors. GENE G. MARCIAL

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