time is the charm in their pursuit of National Gypsum Co.. Since Dec. 12, the Charlotte, N.C.-based trio has made two takeover bids that were rejected by National Gypsum, the second largest maker of wallboard in the United States. The latest bid, for $1.2 billion, or $54 per share, received a warmer reception from a special committee evaluating offers at National Gypsum. The parties Tuesday announced a definitive agreement that makes Delcor the acquirer if no other bidders surface by June 30, or provides for a $15 million fee to Delcor if another bid is accepted after that date. "It's back," said Barnes Hauptfuhrer, a managing director at First Union Capital Partners, said of the deal. Despite their regional rivalry, both banks have maintained equity and debt commitments to Delcor throughout the process. Bankers attributed their persistence to their respect for C.D. Spangler, who formed Delcor as a family investment vehicle. In addition to serving as president of the North Carolina University system, Mr. Spangler holds an equity position of more than 19% in National Gypsum and sits on its board. Mr. Spangler's wife, Meredith, is member of NationsBank's board of directors. "We have an excellent equity partner and sponsor in Mr. Spangler," said Mr. Hauptfuhrer. "He is very well respected by both institutions. We also have two large institutions that want to do more merchant banking-type activities." As in the previous offers, NationsBank and First Union figure prominently on the debt and equity side this time. The new offer increases the size of the loan to approximately $465 million from $325 million. The two banks will syndicate the facility and underwrite the $465 million. They will also underwrite a $150 million senior subordinated bridge loan. Each bank will also hold $50 million of preferred stock, and will own 9% of the company's nonvoting common stock. Delcor will hold the remaining 82% of the company. In previous proposals, shareholders would have held a third of the company. In the new arrangement, they will not hold any stock. Current National Gypsum shareholders are expected to vote on the proposed merger by Sept. 1. Delcor and National Gyspum, in the meantime, will file a merger proxy with the Securities and Exchange Commission. Smith Barney Inc., financial advisers to the special committee, have reportedly found the $54 per share price fair to stockholders. Under the current acquisition agreement, National Gypsum can solicit other offers through Sept. 1. In addition to Delcor's three bids, National Gypsum received a bid in February from BPB Industries PLC for $48.50, which it rejected. "The transaction presents an excellent opportunity for the company's shareholders to realize the value of their stock while preserving the company's ability to identify and obtain the benefit of any superior transactions that may be available," said Steve Humphrey, National Gypsum's chairman and chief executive. The earlier Delcor bids were sidetracked because the special commitee deemed them too low. David Lee Smith, a senior vice president and equity analyst at Southcoast Capital, said the price seemed "fair."
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