The Pac-Man battle of Martin Marietta and Bendix

For the past month, Wall Street has been riveted to a multibillion- dollar soap opera: the Martin Marietta-Bendix Corporation takeover battle.

Now it looks as if the final installment in the series is on the way. By Thursday morning (Sept. 23) the two companies - unless court actions prevent it - will own each other. Thus, the final show may well take place in a courtroom instead of a board room. If the companies can't come to an agreement peaceably, Wall Street analysts say, it will probably take a judge to determine who finally controls whom.

However it turns out, notes Monte Gordon, director of research at the Dreyfus Corporation, it will go down ''as a large asterisk in the annals of corporate history.''

So far, the soap opera has taken all kinds of twists and turns. Bendix, a Michigan-based company, initially offered to buy 45 percent of Martin Marietta for $1.5 billion. Martin Marietta, a Maryland-based company, scorned the offer and instead offered to pay $1.5 billion for Bendix.

Analysts called this a ''Pac-Man offer'' since it resembled the popular arcade game where video characters try to gobble each other up. Bendix's chairman, William M. Agee, also rejected that offer. Then, in a surprise move, Marietta recruited United Technologies to join in its bid for Bendix. United, based in Hartford, Conn., offered $1.5 billion for Bendix as well. It plotted to divide up parts of the company with Marietta. Later, it upped its bid to $1.6 billion.

Bendix received and paid for over 50 percent of Marietta's shares and subsequently bought another 20 percent on the open market. Thus, by Sept. 22 it owned 70 percent of Marietta's stock.

Marietta, on the other hand, had tendered to it slightly over 50 percent of Bendix's stock. If the courts don't intervene, by Thursday, Sept. 23, Marietta could own over 50 percent of Bendix.

Both companies - if they own each other - will then go to court to try to get their own directors and management installed.

Even though it means lucrative fees for the lawyers, not everyone is overjoyed - or even amused - by the takeover battle. Wolfgang Demisch, vice-president and analyst at Morgan Stanley & Co., says the fight is ''damaging to both enterprises.'' Since both companies will be using up their cash to buy each other, Mr. Demisch wonders where they will get the funds to reinvest in their businesses. Mr. Gordon of Dreyfus similarly believes the battle can't be useful since ''it's tying up top management's time and effort.'' He believes that the Defense Department will be watching the battle carefully since both companies are vital defense contractors.

And Frank Drob, an analyst at E. F. Hutton, says he has recommended that his firm's clients sell their Bendix stock if it comes out the winner. He reasons that the company's debt-to-capital ratio will change adversely as Bendix takes on much greater debt to fund its purchase of Marietta. It will also be acquiring Marietta's depressed cement, chemicals, and aluminum businesses, which will be difficult to sell at this time. However, over a two- to three-year period, Mr. Drob believes the move is an advantageous one for Bendix, particularly if the economy turns around.

Mr. Demisch likewise believes Marietta is a good buy. ''Bendix is buying Marietta at the low point in its cycle,'' he noted. The company, he said, is ''well positioned as long as peace doesn't break out.''

Marietta is heavily involved in the MX missile and the Pershing missile contracts. Its only ''soft spot,'' he says, is that the company has not been a major exporter of arms - a burgeoning industry this year. The arms trade will sell $30 billion worth of armanents in 1982 compared with $20 billion last year.

One potential stumbling block to Marietta's offer for Bendix is some anti-takeover proposals Bendix management is trying to get its shareholders to approve. However, analysts don't believe shareholders will approve these proposals. Thus, Bendix has postponed a special shareholders meeting until next week to consider them. If it has control of Marietta by then, it won't need to pass them.

Control will apparently hinge around state laws. Marietta is incorporated in Maryland where the law requires a 30-day notice to shareholders before a special meeting can be called. Bendix, however, is incorporated in Delaware, where a meeting can be called immediately. Thus, Marietta management has maintained it can gain control of Bendix before Bendix can control it.

A further hurdle for Marietta is the disposition of some 4.5 million shares which are held by Citibank as trustee for the Bendix employees. Citibank has tendered the shares to Marietta and Bendix has set up telexes at its plants to try to get individuals to send specific instructions to Citibank not to tender their shares. The instructions must be in by midnight Sept. 22. If enough shares are withdrawn, it would prevent Marietta from acquiring over 50 percent of Bendix.

A final possibility is that the two companies will peacefully come to some kind of agreement. On Sept. 21, Mr. Agee met with Thomas G. Pownall, Marietta's president at Marietta's Bethesda headquarters. Sources indicate that the meeting did not resolve the differences and another meeting was scheduled for the afternoon of Sept. 22.

If the two executives and their platoons of lawyers can't resolve their differences, the next segment of the drama will move to the courtroom. At least one judge, Joseph H. Young, in Baltimore, has indicated he doesn't believe either company will be the winner. To pay for its purchase, he indicated on Sept. 21, the companies will have to sell something else.

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