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Western's ADT bid: $3.5B
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December 18, 1996: 7:38 p.m. ET
Three months after failed link-up with Republic, ADT has a new suitor
From Correspondent Rhonda Schaffler
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NEW YORK (CNNfn) - Western Resources Inc. made a hostile $3.5 billion bid Wednesday for the 73 percent of home-security giant ADT Ltd. that it does not already own.
The bid offered investors $15 in Western stock and $7.50 cash for each ADT share -- a 12-percent premium over the issue's Tuesday closing price of $20.125.
ADT, which provides and monitors electronic burglar alarms for homes and businesses, said in a brief statement that it planned to review the offer "in due course."
Western, a Kansas-based utility, already owns 27 percent of Bermuda-based ADT, which is North America's largest electronic-security firm.
Western's interest, first reported Tuesday by CNNfn, comes less than three months after Republic Industries' planned $4.3 billion purchase of ADT collapsed.
Wednesday's offer also comes just days after Western reached a deal to buy Westinghouse Security Systems, the nation's No. 4 home-security firm.
On Monday, Western agreed to buy Westinghouse Security from Westinghouse Electric Corp. for $425 million in cash and debt assumption.
That deal would make Western the nation's third-largest security-services provider.
Western already owns its own home-security firm, Westar Security.
Western is also involved in an unrelated hostile attempt to buy utility Kansas City Power & Light.
Earlier this year, Western's unsolicited, $1.9 billion bid helped derail KCP&L's planned friendly merger with UtiliCorp United.
Western's acquisition plans come as deregulation brings rapid changes to U.S. utilities.
Some see a utility teaming up with a home-security firm as a natural fit, creating a company that can offer homeowners one-stop shopping.
At the same time, the home-security business is growing about five times as fast as the utility industry is.
Ed Tirello, senior utility analyst at NatWest Markets, said a Western's acquisition of ADT's customer base would also give the power company a chance to chase after 1.7 million new utility customers. (79K WAV) or (79K AIFF)
Western chief executive John Hayes is familiar with deregulation.
He experienced the 1984 breakup of the old Bell telephone monopoly during a 30-year tenure at Southwestern Bell.
"Everything to get ready for (a) competitive market is good for us, whether the competition shows up or not," Hayes said Wednesday during an appearance on CNNfn.
He said that by preparing for deregulation, "we become much better at customer service. We become easier to deal with. We enter fields that offer exciting opportunities for growth if (competition) never shows up. But it is going to show up."
Western Resources apparently doesn't plan to take any breaks in its drive to prepare for deregulation.
A source, speaking on condition of anonymity, said Western hopes to finalize a deal within a month to acquire KCP&L.
Analysts then expect Western to go shopping for even more companies.
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Western Resources
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