Tender Invitation

The offer was not only financially intriguing--$15 million for 18% of a company that has not paid a dividend in a decade-but it came wrapped in mystery. On behalf of an unnamed investor, the venerable Manhattan investment-banking firms of Lehman Bros, and Lazard Freres announced that they would pay $30 a share, $3.25 above the market price, for up to 500,000 shares of Studebaker Corp.

So, last week, began the public maneuvers in an attempt to acquire a controlling interest in South Bend's long-troubled auto and appliance company. Being used was a method that company collectors have come to prefer to the old-fashioned proxy fight. Called the tender offer, the technique involves a public bid by an individual, group or company to buy a specified number of shares of another company's stock at a specified price, which is set high enough to woo sellers. It is quicker, harder to block, and often much cheaper than trying to oust the management of a company by soliciting proxies from shareholders.

Board-Room Debate. The maneuvers for Studebaker began nearly a month ago, when the would-be buyer came to Lehman Partner Frank Manheim, who is also a director of Studebaker. Assured that the buyer had no intention of shaking up Studebaker's management, Manheim arranged a convivial day in New York with Studebaker Chairman Randolph H. Guthrie and President Byers Burlingame.

Still, when the tender offer surfaced, some Studebaker directors urged the board to advise stockholders to reject it. At midweek, Studebaker's directors slipped into Room 1501 of Chicago's O'Hare Airport Inn to debate that matter. They voted to offer the outsider two seats on the board if he succeeded in buying the 500,000 shares. Should Studebaker's owners sell? "Shareholders should decide for themselves," said Chairman Guthrie.

Only after the meeting did Studebaker identify its potential new boss. He is George Wesley Murphy, 61, a onetime used-car salesman who, from his Honolulu base, has amassed a fortune estimated at some $30 million by parlaying a string of auto dealerships into a diversified empire ranging from an Australian motorcar firm to a 23% interest in San Francisco's Union Sugar Co.

A Single Hobby. One of seven sons of a Saskatchewan General Motors dealer, Murphy-like most of his brothers--became an auto salesman while still in his teens. During the Depression he went broke selling Chevrolets in the farm town of Manteca, Calif., but bounced back as an Oldsmobile dealer in Honolulu. He made his first financial killing by stockpiling trucks just before the start of World War II, reselling them at a hefty profit. In 1963, he paid $3,800,000 to buy 90% control of the then--floundering Honolulu Iron Works Co., which makes sugar mills. By chopping off deadwood and expanding, he tripled its profits in a year, two months ago sold out to Ward Foods for $13.8 million, 100,000 shares of Ward stock and a seat on its board.

In Hawaii, Murphy is considered a rather mysterious personage. He lives austerely: once a blimpish 5-ft.-8-in.

200-pounder, he has dieted down to 158 Ibs. He spends half his time flying in pursuit of his fortunes. Says his brother Graydon, an Oldsmobile dealer in Ontario, Calif.: "His hobby is making money - and buying up corporations."

Why should Studebaker hold particular appeal? For good reason. Having shifted its automaking enterprise to Can ada after losing $80 million on it in the U.S., and concentrating its American effort on appliances, Studebaker re bounded from an overall loss of $16.9 million in 1963 to a $13.5 million profit last year. All of it, plus Studebaker profits for several years to come, will be income-tax free, thanks to a $30 mil lion tax loss credit. Only Studebaker's 104,000 stockholders can say whether George Murphy will capture that prize.

His tender offer to buy their shares expires next week. Predictably, Studebaker stock has moved up to just under the tender price: 291.

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