The Problem Now: What To Do With All That Cash

Only 16 months after emerging from a messy bankruptcy, wallboard manufacturer National Gypsum Co. received a surprise $940 million buyout offer on Nov. 15 from a group headed by Chairman C.D. Spangler Jr. Why now? Thanks to new housing starts, Gypsum's profits are soaring. And the company lately has paid off almost all of its $100 million in debt. Most important, Gypsum is awash in cash--to the tune of $55 million. With further profit growth on the horizon, Spangler may not have much to lose. "Cash is cash," quips Barnes Hauptfuhrer, a banker at First Union Corp., which is co-funding the bid. "It's worth what it's worth."

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