Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1916-04-05
SCHWAB MAKES
ANOTHER OFFER
Will Pay $75 Instead of $27
For Pennsylvania Steel
Common Stock

In the sale of the Pennsylvania Steel
Company to the Bethlehem Steel Cor
poration the owners of 1,944 shares of
common stock, being the minority
holdings, will receive SIS a share in
cash instead of $27. as originally Of
fered. The offer of Charles M. Schwab
which was accepted by the Pennsyl-
vania Railroad and Reading interests
and by William III. Donner, who held
76 per cent. of the outstanding stock,
was 500 for preferred and S27 for the
common. They We're to be paid in
bonds of the Bethlehem Steel Corpo-
ration, while the minority holders were
to receive the same terms except that
payment was to be made in cash.
The Bethlehem Steel Corporation,
through ]. II. Ward, president,
now makes an offer of SIS per share
in cash for all outstanding common
stock, payment to be made through
Chandler Bros. e. Co.. where the stock
may be turned in. The offer of Mr..
Ward was sent by the Pennsylvania
Steel Company to the common stock
holders together with the notice call
ing for special meeting on May to
vote upon the question of dissolution.
Before the terms of the sale to Beth
lehem Steel We're finally announced
last February the common stock sold
up to par or 500 in the belief that
llietl lit WOulu be Ddlu 10 IGllTe all
of the stock. subsequently the stock
sold as low as $40, although there has
been little trading in it. In the notice
issued by the Pennsylvania Steel Com
pany yesterday it is stated that holders
of approximately two-thirds of the
preferred and of approximately SO per
cent of the common have agreed to
the terms of liquidation. Upon disso-
luton of the company after the retire
ment of the preferred stock at it's full
par value there would be left for the
common $2,910,S56, or $27.0S per
share. so that the Bethlehem Steel
Corporation is offering considerably
more than the common would receive
in liquidation.
In the notice to the stockholders the
directors say they believe the sale of
the assets of the company to Beth
lehem Steel should be made, as the
company is confronted with conditions
which have required the directors to
consider the future with special refer
ence to the imperative need of further
capital. The amount imm ediately
necessary is estimated at at least
$4,000, 900. The board points out that
it would be difficult to raise these sums
on satisfactory terms on bond and
mortgage, as the plants are already
mortgaged and substantially all the
shares of stocks of the more valuable
SuDSluldfleS are dlGGduN plGuSeu. new
preferred stock cannot be issued, as
the limit OF that issue has been reached
under the laws of New jersey, unless
the common stock is increased, and it
is not deemed practicable TO market
additional common stock. 1T is also
pointed out that money for needed i'm
provements would have to come from
earnings and there could be no
restoration of dividends upon the pre-
ferred until the plants were improved
sufficiently to meet modern competi-
tive methods, dividends being passed
in 1918 and not resumed
At the annual meeting of the Beth
lehem Steel Corporation held in New
York yesterday Charles NJ. Schwab, in
answer to the query of d stakeholder,
said that the maximum amount that
can be involved i'm the purchase of the
Pennsylvania Steel properties so far as
immediate cash is concerned is
50. 900. 900, but he added that some of
the holders probably will accept bonds.
Bethlehem Steel will not be forced to
do any financing on this transaction.