City & Business: A mean sense of timing

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WILLIAM Doyle Ruckelshaus, the splendidly named chairman and chief executive of Browning-Ferris Industries, is famously penny-pinching. Last year, he barred photographs from the company's annual report on the grounds that they were an expensive luxury. This year, he abandoned sending quarterly reports to shareholders to save on postage.

You'd expect a bid from Texas-based BFI to look mean, and you wouldn't be disappointed. Its 109p-a-share offer for Attwoods, which values the waste disposal company at pounds 364m, includes no bid premium at all. The shares have traded between 107p and 165p this year.

Mr Ruckelshaus, who once worked for the FBI, seems to have staked out his target with the efficiency of a Hollywood G-Man. He pounced on the company when its share price hit its low point so far this year. The timing also means Attwoods will have to report what are widely expected to be lousy 1994 results in the middle of its defence programme.

And his deal with Laidlaw looks almost too good to be true. BFI has an option to buy the Canadian company's 29 per cent stake in Attwoods for 109p. But it can pull out if its bid fails, and it pockets the difference if anyone else ends up with the stake.

It is clinching this deal which is Ruckelshaus's masterstroke. Laidlaw has three directors on the Attwoods board and ought to know what's going on in the company. It holds the key to the future of Attwoods. Yet it wants out, and apparently at any price, having been hawking the stake around for months. Shareholders will inevitably ask themselves if they can expect much more. The battle has only just begun, but it appears the result will depend solely on price: it's a cash bid. Attwoods, after four lousy years and a series of undelivered promises, can expect no loyalty from shareholders.

The key to any kind of defence will be to convince shareholders that Laidlaw sold too cheaply. There is a tenuous, but just about plausible, line of argument. Laidlaw is itself under enormous pressure from its majority shareholder, Canadian Pacific, to improve its own lousy performance. Jim Bullock, the newly installed Laidlaw chief executive, has to make his mark, and quickly. If he sells the Attwoods stake now, it can be written off as his predecessor's mistake. If he hangs on, it becomes his own millstone. Hence the indecent haste, and the knockdown price.

Hmmmm. Well I suppose it's a good enough argument to wrest a few more pence per share from tight-fisted Mr Ruckelshaus. But I doubt he'll have to up the ante by very much to win this battle.