The Quiet One

Seldom has a company boasted so many suitors in such quick succession as Celotex Corp., a Chicago manufacturer of building supplies. It was his ardent pursuit of Celotex that brought about the downfall of the "boy wonder" financier, Eddy Gilbert (TIME, June 22). No sooner had Gilbert fled to Brazil than a New York building materials firm named the Ruberoid Co. decided to make a try for Celotex. It offered to buy 350,000 Celotex shares at $25 apiece--which was 8 3/4 above Celotex's lowest price after the Blue Monday skid but 17 3/8 below the 1962 high of 42 3/8 that the stock hit during Gilbert's maneuvers last February. Last week cool, lanky James Willis Walter, 39, founder of Tampa, Fla.'s Jim Walter Corp.--which he has parlayed from a $400 loan into the nation's biggest builder of shell houses--announced that he too had designs on Celotex. In a secrecy-shrouded maneuver that took barely ten days, Walter bought up more than 40% of Celotex's 1,028,000 shares at "about $30 a share."

Lots of Assets. On the face of it, Celotex hardly seemed a prize catch. Its sales have been slipping steadily from their 1956 high of $76.5 million, and for the first half of this year the company reported a $1,200,000 loss. But Wall Street is convinced that Celotex's troubles are largely the result of stodgy management --and Walter is anything but stodgy. With sales of skeleton shell houses (which the buyer finishes) slipping because of fierce price competition,Walter recently branched out into semifinished houses-which will provide a readymade market for Celotex insulation, gypsum board and roofing.

Celotex has other attractions, too. Explains a Celotex executive: "We have a lot of valuable assets which are carried on our balance sheet at a very nominal figure." Among them: 48.3% of the stock of New Orleans' South Coast Corp., which owns 89 square miles of Louisiana sugar land including 4,000 acres of potential industrial sites along the new Houma Canal to the Gulf of Mexico.

No Security. Jim Walter moved in at the right time. Fortnight ago, he secretly set three Wall Street firms to buying blocks of Celotex from holders who had been disillusioned when the Eddy Gilbert scandal sent Celotex prices tumbling. Then, after winging off to Chicago to tell Celotex directors of his plan, he arranged a surprising piece of financing. Largely on the strength of a spotless credit record established by huge borrowings to finance his home buyers, Walter persuaded a syndicate headed by New York's First National City Bank to give him a longterm, unsecured loan of $10 million.

Only when the price of Celotex began moving up last week did Wall Street generally guess what was afoot. By week's end, Celotex shares had risen from a 1962 low of 16 1/4 to 26 1/8, leaving Ruberoid's $25 offer behind. Jim Walter seemed well on the way to his avowed purpose of getting 51% of Celotex. Which only goes to show once again that when it comes to courting, it's the quiet ones you've got to watch.

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