CORPORATIONS: Raid Repelled

To a group of raiders, National Casket Co., biggest firm in its field, looked like a golden opportunity. As a company director pointed out: “A man could liquidate this company and make millions.” Last week, at its annual meeting, National Casket fought off just such a raid in one of the strangest proxy wars in years. A month ago, a firm of Manhattan lawyers acting for an unidentified group suddenly offered to buy 32,000 shares of the company’s 63,370 shares of common stock. The price: $48.50 per share, $8.50 more than the market price.

National Casket’s stunned management knew why the raiders were interested. The company had a book value of $102.92 per common share. Thus, for an investment of $1,552,000 to win stock control, the raiders could sell off the company’s assets, pocket a quick $1,700,000 profit. Angry and determined, National Casket’s management lost no time fighting back. First, it alerted all stockholders to the raid, released its 1955 earnings weeks ahead of schedule, promised to boost dividends. The report: sales of $16,997,754, impressive earnings of $583,542 or $4.22 per share v. $1.85 per share in 1954.

Last week, at the annual meeting, not a single ballot was cast in opposition to the current management. After the vote, National Casket boosted dividends, upped the rate 130% to $3 annually per share.