Funeral co. to kill merger
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September 25, 1996: 9:08 a.m. ET
Loewen Group turns down Service Corp.'s $2.8 billion takeover bid
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NEW YORK (CNNfn) -- Funeral home and cemetery company Loewen Group Inc. on Wednesday said it has rejected a $2.8 billion hostile takeover bid from rival Service Corporation International.
Raymond Loewen, chairman and chief executive officer of the Canadian-based company, released a statement saying that his company is "clearly the preferred acquirer in its industry" and would not benefit over the long-term from the takeover.
"The Loewen board of directors has unanimously concluded that the best way to maximize value for our shareholders is through the continued implementation of the company's long-term business plan as an independent company," Loewen said. "I am very optimistic about our ability to build shareholder value in the future as we execute Loewen's growth plans."
Citing a 41.5 percent rise in revenues and a 36.8 percent rise in earnings over the last five years, Loewen said there is too much room for his company to grow on its own.
SCI, based in Houston, made its unsolicited offer last week, saying it would pay $2.8 billion in stock to Loewen shareholders and assume another $1.3 billion in debt.
Such a merger would have combined the two largest funeral home and cemetery companies in North America. However, in rejecting the bid Loewen's chairman said SCI appeared to be using the takeover attempt as a way of eliminating its main rival.
There was no immediate comment from SCI or any indication of whether or not it will continue to pursue the takeover.
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