`We have no preconceived notions. We’re not going to come in on Day 1 and clean everybody out.’
Alfred Kingsley, of Greenmarine Acquisition Corp., on Sept. 12
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The new owners of Outboard Marine Corp. made it clear Thursday that a new management team is coming, but so far nobody has been chosen to be at the helm.
Harry W. Bowman turned in his resignation as chairman, president and chief executive officer of the Waukegan-based manufacturer of boats and marine engines now owned by Greenmarine Acquisition Corp.
Only two weeks ago, Greenmarine had suggested that Bowman and his management team might be retained. And Bowman said he had agreed to talk to his new bosses about that possibility, allaying fears among employees that the new owners would come in wielding axes.
But investors–even those who favored Greenmarine’s rival, Detroit Diesel Corp., in the bidding for OMC–frowned on the notion that Bowman might stay, so to them Thursday’s announcement came as a relief. What did surprise some, however, is that a new leader was not named.
Greenmarine’s $18-a-share offer bested an earlier offer by Detroit Diesel for $16 a share.
A Greenmarine principal, Alfred Kingsley, will assume the chairmanship of OMC. But the offices of president and chief executive officer–the people who would actually run the company–remained conspicuously vacant.
Some investors said even before Greenmarine’s victory was complete that they were surprised that Kingsley and his partners did not have a new management team ready to take over at OMC.
Greenmarine has emphasized that it wants to return OMC to profitability, not break it up. To that end, some investors said, the new owners need to retain the company’s 13,500 employees and key managers. Having new management on site the day after the buyout would have generated a great deal of confidence among employees, they said.
In fact, after the buyout was accomplished on Sept. 11, the victors said they had not even made those decisions. Thursday, OMC spokeswoman Marlena Cannon said Kingsley had expressed no timetable for filling the top job beyond saying he wanted to do it “soon.”
“He’s not anxious to have this thing hang for a long time, either,” she said.
But while some investors may be fretting–and employees may be shaken again–several analysts said they read little significance into the lack of a CEO at this juncture.
Harriet Baldwin of Lehman Brothers in New York noted that Bowman isn’t disappearing from the scene. His “golden parachute” calls for him to be retained as a consultant after a takeover; Greenmarine said he will remain in this capacity until next September.
In addition, all the other top OMC officers have stayed on so far, Cannon said.
Baldwin added, “We were expecting them to do some management turnover, and they may not be ready to announce the folks they’re going to put in there. If it’s six months from now and they still don’t have folks in those top positions, I’d have to change my opinion.”
Michael Pizzi, of Standard & Poor’s Equity Group in New York, noted, meanwhile, that Greenmarine was a last-minute player whose offer came not after the usual months of negotiating and due diligence, but after individual investors saw they were in danger of losing money.
“They started buying OMC stock when there was speculation the company was going to be bought out by somebody. The average price they paid was above Detroit Diesel’s offer. They came in at the last minute. It wasn’t something they had planned for a long time. They were just trying to protect their investment. They didn’t have the time that you’d have in a normal merger.”
By contrast, Detroit Diesel made its offer after lengthy negotiations with OMC and so probably had decided major personnel issues before making its offer public, he said.
Greenmarine consists of Kingsley and Gary Duberstein, who are principals of another New York-based investment group called Greenway Partners. They joined with several funds controlled by high-profile investor George Soros to create Greenmarine.
All were investors in OMC who believed Bowman’s team had not been aggressive enough to turn around the company’s sagging finances.
At the same time, they decried Detroit Diesel’s $16-a-share offer as inadequate and countered with an $18-a-share offer.
Bowman was hired away from Whirlpool Corp. in 1995 to shore up OMC’s flat financial performance. Despite launching a strategy to consolidate operations and improve customer relations, OMC fell into the red, prompting the company to seek a buyer or other source of cash.
Kingsley and Duberstein were in Waukegan Thursday. Duberstein has moved into an office at OMC’s headquarters, but neither he nor Kingsley know yet how much time they will spend on site, Cannon said.
