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State gives go-ahead for takeover of Hobart Corp. by CP

By TIM MILLER

COLUMBUS, Ohio -- The Ohio Divison of Securities ruled Friday that Canadian Pacific Ltd. of Montreal can proceed with its $380-million takeover of Hobart Corp., the Troy, Ohio-based manufacturer of kitchen appliances.

Kenneth Krouse, securities commissioner, issued a four-page ruling, saying CPE Acquisition Co., an American subsidiary of CP, had complied with Ohio law concerning the takeover.

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Hobart had been fighting the proposed takeover, saying CPE had not followed Ohio and federal law and that the takeover would be detrimental to Hobart shareholders.

Hobart still had suits pending that could block the takeover, but Friday's ruling was considered a major hurdle for CPE.

Krouse agreed with most of the conclusions reached earlier in the month by hearing officer Nodine Miller, who had said the takeover should be allowed provided CPE makes several amendments in its proposal.

The takeover bid began last Dec. 15 when CPE offered $32.50 a share for all outstanding Hobart stock, which was then selling for about $19 a share. If all the stock is purchased, the total price would be about $380 million.

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David B. Meeker, president and chief executive officer of Hobart, termed the takeover attempt 'uninvited and unfriendly' and said it would not be to the advantage of the company's shareholders.

Financial analysts said CP, a diversified transportation and natural resources company, had been looking for acquisitions in the United States and believed Hobart would tie in with its Syracuse China Corp., which makes commercial chinaware.

Hobart employs 4,141 employees in 10 plants -- four in Troy, two in Dayton and one each in Greenville, Hillsboro, Medina and West Liberty.

Hobart's proxy statement of April, 1980 shows its directors and officers owned only 2.2 percent of the company's 11.4 million outstanding common shares.

The First National Cincinnati Corp., a bank holding company, owned beneficially 5.3 percent of the stock and Edward S. Johnston of Mesa, Ariz., owned 7.1 percent.

Hobart, which began operations in 1897, earned $7.1 million or 62 cents a share on sales of $166.7 million in the third quarter of fiscal 1980, compared with earnings of $5.8 million or 51 cents a share on sales of $148 million for the same quarter of 1979.

In his ruling, Krouse noted Hobart had paid dividends to its shareholders continually since 1906 and requested that CPE provide further information concerning its dividend plans if the takeover was successful.

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Krouse concluded the takeover would 'not violate ... the Revised Code and that effective provision would be made for fair and full disclosure to the shareholders of the Hobart Corp. of all information material to a decision to accept or reject the offer.'

Meanwhile, the Senate Judiciary Committee will hold hearings Monday on the takeover at the request of Sen. Howard M. Metzenbaum, D-Ohio.

Metzenbaum said the acquistion raises questions about possible unemployment and antitrust violations.

'Our state ... could very well lose even more jobs through this hostile takeover bid,' he said.

He said since CP makes commerical tableware and Hobart manufactures commerical food processing equipment, 'Canadian Pacific may well plan to use Hobart's distribution system to gain a stranglehold on the entire tableware market.'

David B. Meeker, president and chief executive officer of Hobart, termed the takeover attempt 'uninvited and unfriendly' and said it would not be to the advantage of the company's stockholders.

Financial analysts say Canadian Pacific, a diversified transportation and natural resources company, has been looking for acquisitions in the United States and believes Hobart would tie in with its Syracuse China Corp., which make commercial chinaware.

Hobart employs 4,141 Ohioans in 10 plants -- four in Troy, two in Dayton and one each in Greenville, Hillsboro, Medina and West Liberty.

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Hobart's proxy statement of April 1980 shows that is directors and officers as a group own only 247,120 or 2.2 percent of the company's 11.4 million outstanding common shares.

The First National Cincinnati Corp. a bank holding company, owns beneficially 5.3 percent of the stock and Edward S. Johnston of Mesa, Ariz., owns 7.1 percent.

Hobart, which began operations in 1897, earned $7.1 million or 62 cents a share on sales of $166.7 million in the third quarter of fiscal 1980, compared with earnings of $5.8 million or 51 cents a share on sales of $148 million for the same quarter of 1979.

In his ruling, Krouse noted that Hobart has paid dividends to its stockholders continually since 1906 and requested that CPE provide further information concerning its dividend plans if the takeover is successful.

Krouse concluded that the takeover would 'not violate ... the Revised Code and that effective provision would be made for fair and full disclosure to the shareholders of the Hobart Corp. of all information material to a decision to accept or reject the offer.'

Meanwhile, the Senate Judiciary Committee will hold hearings Monday on the takeover at the request of Sen. Howard M. Metzenbaum, D-Ohio.

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Metzenbaum said the acquistion raises questions about possible unemployment and antitrust violations.

'Our state ... could very well lose even more jobs through this hostile takeover bid,' he said.

He said since Canadian Pacific makes commerical tableware and Hobart manufactures commerical food processing equipment, 'Canadian Pacific may well plan to use Hobart's distribution syystem to gain a stranglehold on the entire tableware market.'

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