Chase Capital Partners, the private equity arm of Chase Manhattan Corp., plans to sell about a third of its stake in International Home Foods Inc.
Chase, which hopes to complete the sale by the end of September, has been many things to this company over the last two years: investor, lender, underwriter, adviser, and now seller.
Chase Capital first took the equity stake two years ago when its parent helped take International private. Chase Manhattan advised and financed Hicks, Muse, Tate & Furst's purchase of 80% of the Parsippany, N.J.-based food manufacturer.
American Home Products Corp., International's former owner, retained a 20% interest in the company after the Nov. 1, 1996, buyout.
But American sold part of its remaining shares when the company went public again just one year after the buyout.
International's stock price rose sharply after the initial public offering, through which it sold 13.2 million shares at $20 each. But the stock is now off nearly 50% from its 52-week high of $35 in March and has spent the past month in the low $20s. It closed at $18.9375 on Thursday.
Last week American registered with the Securities and Exchange Commission to sell another large block of shares that would reduce its interest in the company to about 6%.
Chase would not be able to initiate an offering on its own. But the bank is exercising its right to piggyback on the American offering.
Chase and American have registered to sell 900,000 and 3.5 million shares, respectively. The offering is expected to begin in September and close by the end of that month. As many as 660,000 additional shares might be sold if investor interest were strong.
International would not receive any proceeds from the sale. But the stock is very closely held, and executives are looking forward to increasing the stock's liquidity, said a spokeswoman for International Home Foods.
International Home Foods manufactures and distributes such well-known brands as Chef Boyardee, Bumble Bee tuna, Pam cooking spray, and Polaner jam.
Executives plan to expand into food service and international markets, perhaps through strategic acquisitions, according to the SEC filing.
Hicks Muse, the aggressive Dallas-based buyout shop, will retain a majority interest in the company after the current offering. International remains highly leveraged since the 1996 buyout, with outstanding debt in excess of $1.1 billion.
Chase and Bankers Trust Corp. syndicated a $770 million loan and sold $400 million in junk bonds to help finance the buyout by Hicks Muse.
Donaldson, Lufkin & Jenrette Securities Corp. and Goldman, Sachs & Co. are leading the current offering. It will be co-managed by BT Alex. Brown, Chase Securities Inc., Credit Suisse First Boston Corp., and Morgan Stanley, Dean Witter & Co.