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Dime To Merge...
Mitch look at the dangling half-sentence at the end of this article. Refer to p36 of 4/20/98 issue!
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Business New Haven
4/20/1998
By: Russell Stone
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WALLINGFORD - The announcement that Dime Financial Corp. (NASDAQ: DIBK) was to merge with HUBCO Inc. finally provided an explanation for Dime's sudden jump in price. Over March 26-27, Dime's shares leaped from just over 30 to 39 before retreating slightly (see Market Wrap, April 6). HUBCO, a bank holding company and parent of Bridgeport's Lafayette-American Bank, then announced it would acquire Dime Financial, holding company for Dime Savings Bank, for $38.25 in HUBCO stock for each share of Dime. Major fluctuations in HUBCO's share price could alter the terms of the offer. The merger is subject to regulatory and shareholder approval.
In the deal, Dime Financial will receive five seats on HUBCO's board. HUBCO purchases Dime's assets, including 11 branches in New Haven County, for just over $200 million. That prices Dime Financial at two and one-half times book value, or 19 times 1997 earnings. The merger with Dime will mark HUBCO's 24th acquisition in seven years.
...But Will Echlin?
BRANFORD - Though the stock market seems to think SPX Corp.'s hostile takeover of Echlin Inc. (NYSE: ECH) will succeed, as the stock price has climbed again after falling on fears the Connecticut legislature would block the merger, Echlin's management and board of directors are not giving up without a fight. Some speculation links Echlin with Cooper Industries. While Cooper had been earlier proposed as a “white knight” which might rescue Echlin from SPX, Cooper's announcement that it will leave the auto industry has turned that on its head. Rumors now suggest that Echlin might purchase Cooper to complicate SPX's takeover bid.
But the more immediate threat to Echlin is SPX's claim that it had collected support from enough shareholders, well over the 35 percent required by Connecticut law, to force a special meeting and oust Echlin's current board. Echlin, however, countered that far from the 46 percent that SPX claimed, it in fact presented valid proxies representing only 1.9 percent of Echlin's outstanding shares. The vast majority of SPX's proxies, according to Echlin general counsel Jon Leckerling, were improperly formulated or could not in fact be traced to registered owners of Echlin stock. Echlin accordingly sued SPX for violating securities law and making false statements to mislead Echlin shareholders. SPX in turn dismissed Echlin's lawsuit as “frivolous” and deserving of a place in the “Shareholder Hall of Shame.”
Breaking Up Is Hard To Do
NORWALK - Oxford Health Plans (NASDAQ: OXHP) reached a settlement package with its outgoing chairman and founder worth $9 million with benefits. Under the agreement, Stephen Wiggins, who resigned in February after a collapse in Oxford's stock price brought on by billing problems and miscalculated premiums, will receive a cash payment of $3.6 million and yearly payments of $1.8 million for three years along with an office and secretary in return for consulting services. The New York superintendent of insurance, concerned that his state and its consumers would pay for Wiggins' golden parachute, ordered Oxford to suspend the severance payments in light of Oxford's “pending applications for rate increases.”
Legal Victory
NORWALK - United States Surgical Corp. (NYSE: USS) won a key appeal on a patent infringement case filed by Ethicon Inc., a subsidiary of Johnson & Johnson. Ethicon had accused U. S. Surgical of infringing on its design for a trocar, a tube used in certain minimally invasive surgical procedures. A Hartford district court dismissed Ethicon's suit in February 1997, but Ethicon appealed. A Washington, D.C. federal appeals court upheld the lower court ruling and dismissed Ethicon's claim. This ruling clears the way for U.S. Surgical to embark on its own patent infringement countersuit against Ethicon.
The Bright Side
of Salmonella
NEW HAVEN - Vion Pharmaceuticals (NASDAQ: VION) has demonstrated in mice the effectiveness of its TAPET technique of using genetically-engineered Salmonella bacteria in treating tumors. The bacteria, altered to be harmless, accumulate in tumors in concentrations up to 1,000 times higher than in normal tissue. After a non-toxic prodrug is administered, a special enzyme in the modified bacteria converts the prodrug into an anti-cancer agent, thus delivering the cancer-fighting drug directly to the tumor and minimizing side effects.
of human resources for Data General's manufacturing organization.
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