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Manville rebuffs $2.4B offer
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December 8, 2000: 6:07 p.m. ET
Bear, Hicks $2.4B takeover of Manville ends by mutual agreement
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NEW YORK (CNNfn) - Building products maker Johns Manville Corp. ended Friday its $2.4 billion merger agreement with an investor group led by Hicks, Muse Tate & Furst and Bear, Stearns & Co.
Denver-based Johns Manville Corp. (JM: Research, Estimates) said the deal was terminated by mutual agreement. The parties ended the transaction because they were unable to renegotiate acceptable terms for their merger. Weak industry conditions, an increasingly negative outlook for the economy and unfavorable financial markets also contributed to the decision, Johns Manville said.
The company also declared a quarterly dividend and will pay 6 cents a share on Jan. 12 to all that are Manville stockholders at the close of business on Dec. 26.
In June, Hicks and Bear Stearns agreed to pay $2.4 billion, or $13.625 a share cash for the No. 2 U.S. producer of building insulation. The deal also provided shareholders with preferred stock valued at $2 a share.
In October, Manville reported disappointing third-quarter earnings and confirmed it was renegotiating the $2.4 billion sale agreement with affiliates of Hicks, Muse Tate & Furst and Bear, Stearns & Co. The company also said at that time that it did not believe the transaction could be completed on the terms contained in the agreement.
 Approval of a deal would have to come from Johns Manville and The Manville Personal Injury Settlement Trust, which controls nearly 76 percent of the company, said Johns Manville spokesman John Cummings.
The trust was created in 1988 to handle claims due to the company's past manufacture of asbestos. The liability from asbestos had forced Johns Manville into reorganization under bankruptcy protection laws in 1982. The reorganization and creation of the trust was approved by a federal bankruptcy court in 1986.
Published reports said the trust shot down the Hicks and Bear Stearns takeover. Cummings declined to comment on such reports but said both bodies independently reviewed the decision.
Cummings also declined to comment on whether the 142-year-old company is shopping for a new buyer but admitted that the Trust would be looking "to monetize its investment."
"There is not pressure but there is motivation both within the company and with Manville Trust to optimize the value of this enterprise," Cummings said.
Goldman Sachs advised the Manville Trust while J.P. Morgan served as financial advisor for Johns Manville.
Johns Manville shares lost 75 cents to $9.25 Friday. 
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Johns Manville
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