There was no paucity of excitement in 1994 around the Englewood, Colo., corporate headquarters of Big O Tires Inc., the nation's largest franchiser of independent tire dealerships. Last January, the firm terminated a marketing agreement for General Tire to make Big O-brand tires. Production was picked up by Big O's other supplier, Kelly-Springfield Tire Co.
Then in April, in a move still causing repercussions within the company, publicly held Big O's second-largest shareholder began grumbling about the lackluster performance of its stock.
That led to a proxy vote forcing Big O to enlist the services of an investment banker to explore possibilities to enhance the company's value.
Eventually, several acquisition offers ensued, including one last October, for $18 per share, by California-based AKH Co. Inc., a privately held 125-store retail tire chain.
As AKH began its due diligence review of Big O, on Dec. 5 a group of Big O senior management and dealers-led by President and CEO Steven P. Cloward-made a bid of $18.50 per share to purchase the company's outstanding stock.
Their buy-out plan, returning Big O to private company status, would, in the words of one Big O dealer, put the firm back in the hands of its ``primary movers and shakers''-the franchisees.
The group's offer provided the catalyst leading to two class action lawsuits on behalf of Big O shareholders seeking to quash the group's acquisition. The plaintiffs believe the company is being undervalued, and instead want it put on the market in the hope more lucrative bidding will take place.
They have asked the court to permanently put a halt to the Cloward group's buy-out.
Though it seems much of the company's time was consumed by the proxy battle and potential suitors, Big O also made news in August when it shaved prices 5 to 15 percent on its Big O private brand tires in an effort to increase sales at its 370 stores in 18 states, primarily in the West and Midwest. Dealers told TIRE BUSINESS they would likely pass most-if not all-of the resulting cost savings on to customers.
Last year Big O also:
was rated the nation's top tire dealership franchiser by Entrepreneur magazine;
announced an ``aggressive building program for new franchising,'' calling for the construction of 168 stores over the next five years;
secured financing for a new warehouse complex opening in the Las Vegas area.