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Frantz Manufacturing Co. of Sterling, Ill., which is battling a takeover by EAC Industries of Chicago, said it has received a cash merger offer of $42.50 a share, or $26.6 million, from an investment group led by Frantz`s president and chief executive officer, H.B. Musgrove. EAC, which claims to hold 51 percent of Frantz`s stock, has offered $38 a share for the remainder. Frantz disputes EAC`s claim of majority ownership, saying the 125,000 shares it issued to an employee stock ownership plan diluted EAC`s stake to 42 percent. Last month, however, a Delaware Chancery Court voided Frantz`s issuance of the shares to the plan and upheld the election of EAC Chairman Peter Fritzsche as a Frantz director. Frantz is appealing that ruling.
