Tapping the Till

Berner eyes Kennecott cash

Takeover artists are often suspected of wanting to tap the till of the target company, but hardly any ever admit it--let alone boast about it. An exception is T. Roland Berner, chairman of Curtiss-Wright, who is campaigning to unseat directors of Kennecott Copper and install his own board in a shareholder election May 2. In the most unusual proxy statement in recent years, Berner last week vowed that if Curtiss-Wright gets control, it will distribute some $660 million of Kennecott's assets to stockholders--who prominently include Curtiss-Wright. It owns 3.3 million Kennecott shares, or nearly 10% of the total.

Curtiss-Wright told Kennecott's shareholders that it would raise most of the money by having Kennecott sell Carborundum, for $567 million or a bit less. Berner would make up the rest by dipping into Kennecott's $140 million in cash and securities, and perhaps by having Kennecott borrow against a $400 million promissory note.

Money in hand, Curtiss-Wright might have Kennecott make a cash distribution of some $20 a share to its own stockholders. In that case, Curtiss-Wright would get back $66 million on Kennecott stock that it paid around $77 million to buy. Berner's preferred alternative is to have Kennecott buy back half its 33.1 million outstanding shares for about $40 each--including half the stock that Curtiss-Wright bought for an average $23.42 a share. Other Kennecott stockholders might find Berner's plans attractive. Kennecott management is sure to find them a tempting target for that old pejorative: raid.

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