Sunshine to Pay $865.2 Million To Buy Rexene --- Stock Market Is Skeptical Of Cash-Securities Pact; Rexene Shares Fall $2.50
DALLAS -- Sunshine Mining Co. said it signed a letter of intent to buy Rexene Corp. for $28 a share, or $865.2 million, in cash and securities, but the market responded skeptically to the proposal.</br></br>Rexene's shares fell $2.50 yesterday to close at $22, after climbing more than $6 in New York Stock Exchange composite trading Friday.</br></br>The drop resulted from concern about how much and what kinds of securities will be offered and how the transaction will be financed. The two companies said the financing and the exact amounts of cash and securities haven't been determined, and won't be disclosed until they reach a definitive agreement, which is expected before Jan. 31.</br></br>The accord highlights the role that Drexel Burnham Lambert Inc. has come to play as both suitor and matchmaker in the business world. Drexel and a group of more than 100 employees would reap fees and huge profits from the combination of two clients.</br></br>The purchase also allows Sunshine, a precious metals and oil and gas concern, to diversify into the chemicals business, while giving Rexene access to about $175 million in tax benefits to shield its healthy profits.