ENGLEWOOD, Colo.-After sweetening the pot a bit in their bid to acquire Big O Tires Inc., a group of senior management and franchised dealers finally has reason to smile. On June 7, the company announced that its board of directors had approved in principle the group's proposal to acquire Big O for $16.50 per share, or about $55 million, an offer the group had tendered two days earlier.
An April 6 bid by the group, led by Big O President Steven P. Cloward, of $16 per share-about $53 million-was turned down last month by the company's Investment Committee as too low. Early this year the Cloward group withdrew its initial $18.50-per-share offer after hitting roadblocks in obtaining financing.
The latest offer is subject to contingencies including the purchasers obtaining acceptable financing and participation in the buy-out by not less than 85 percent of the company's franchised dealers-elements Mr. Cloward has said are in place. The group also needs participation by at least 80 percent of the shares held by Big O's Employee Stock Ownership Plan.
The Cloward group has, according to a June 5 statement from the company, also asked that it be reimbursed for all its expenses in connection with the negotiation of a merger.
When a definitive merger agreement is reached it will be subject to approval by the Big O board as well as the company's stockholders, who held their annual meeting June 7.
Frank L. Carney, chairman of the Big O board's Investment Committee, said the company will try to sign a merger agreement by July 1. Mr. Cloward could not be reached before TIRE BUSINESS went to press June 8.