Pacific Scientific Urges Against Takeover

Calling an unwelcome suitor’s week-old tender offer “inadequate,” Newport Beach electronics maker Pacific Scientific Co. urged its shareholders to reject Kollmorgen Corp.’s $264-million hostile takeover bid. The company also erected an expensive anti-takeover barrier in an effort to thwart competitor Kollmorgen’s advances and said it has retained financial advisor BancAmerica Robertson Stephens to consider alternatives, including selling to a “white knight” investor. Investors sensing a potentially profitable battle for control of the company boosted Pacific Scientific’s shares by $1.75. The $23.44 closing price was the highest in 23 months and more than 14% above Kollmorgen’s $20.50 per share offer. The company’s so-called poison pill anti-takeover package would boost the number of shares an unwelcome suitor must buy to acquire control and guarantees top executives from 12 to 130 weeks of pay and bonuses if they are forced out within two years of a change of control.