New Zealander Most Likely the ‘Mystery Suitor’ : Wrather Rejects Unsolicited Takeover Bid

Wrather Corp. said Monday it has received and rejected an unsolicited merger offer from an unidentified suitor and has toughened its “poison pill” takeover defense.

The Beverly Hills hotel management firm, whose holdings include the Disneyland Hotel, declined to reveal who made the takeover bid, which carried a per-share price tag “in the low $20s.” Company directors Sunday rejected the offer because “the board would not agree to certain of the conditions attached to the offer,” which Wrather did not disclose in a prepared statement released Monday.

The most obvious suspect in the takeover bid is Industrial Equity (Pacific) Ltd., a Hong Kong investment firm controlled by millionaire financier Ronald Brierley, a New Zealander who runs his investment empire from Sydney, Australia. Industrial Equity already owns about 28% of Wrather stock and has given notice it might acquire more than 50% of Wrather’s 7.25 million shares outstanding.

No executive of the U.S. arm of Industrial Equity was available for comment Monday. Another major shareholder, Ronald S. Baron of New York-based Baron Capital Inc., who has a 9% stake in Wrather, did not return a reporter’s telephone calls.

A hostile takeover of Wrather would be difficult because Chairman Bonita Granville Wrather and her son, company president Christopher Wrather, control about 35% of the firm’s stock. In all, officers and directors control about 45% of the company’s stock, said Roy M. Rawls, Wrather’s chief financial officer.

Wrather’s existing anti-takeover defense was strengthened so shareholders can exercise rights to buy preferred stock if someone acquires 20% or more of the company after July 30. The rights also become exercisable if a shareholder who already owns 20% or more increases the stake by 1%.

The “shareholder rights” plan was also amended to allow shareholders to buy common stock at half price if someone acquires 30% or more of the company after July 30, or adds 1% to existing holdings of 30% or more. Previously, the plan went into effect if someone acquired 50% of the company’s stock.

Wrather’s stock closed Monday at $21.875 on the American Stock Exchange, up $1.375.

Wrather Corp. owns and operates the Disneyland Hotel and adjacent convention center; it operates the Queen Mary and Spruce Goose attraction in Long Beach, and runs the landmark Biltmore Hotel in downtown Los Angeles. The company also explores for oil and gas in Texas and Louisiana.

Industrial Equity (Pacific), which has been buying pieces of U.S. companies since the early 1980s, mostly in the last two years, follows the Brierley philosophy of investing in undervalued stocks and then taking an active interest in management practices. Industrial Equity’s U.S. investments include the Cleveland-based Higbee department store chain, Newport Beach-based Smith International, which makes oil field equipment, and Los Angeles-based CalMat, a cement producer.