IU INTERNATIONAL: TALKS COULD LEAD TO ACQUISITION

IU INTERNATIONAL: TALKS COULD LEAD TO ACQUISITION

IU International Corp., which owns six full-truckload motor carriers, said it is negotiating a possible deal that could involve an acquisition or recapitalization of the company.

IU's plans were disclosed Tuesday in a filing with the Securities and Exchange Commission in Washington. On Monday, the Philadelphia-based diversified services and transportation company rejected as inadequate a $19- a-share tender offer from Neoax Inc.IU said it was in the preliminary stages of negotiations with outside parties. The company said its board was exploring alternatives to Neoax's offer, including a merger, leveraged buyout, recapitalization, reorganization or a sale of assets.

Other options being evaluated include a tender offer and a change in the company's capitalization or dividend policy.

IU's filing also said the company had approved employment agreements that guarantee 10 of the corporation's top officers lump-sum payments or continued salaries if they stop working because of a change of corporate control.

Louis A. Guzzetti, president and chief executive of Neoax, said IU's filing absolutely does not change his company's interest in IU.

We remain optimistic that eventually they will have to talk to us, he said. IU has refused repeated offers to meet with Neoax officials, according to Mr. Guzzetti.

In rejecting the Neoax offer, John Gilray Christy, IU chairman and chief executive, said the Philadelphia company's recent restructuring has created substantial value for our shareholders and better growth prospects for IU in the future as an independent company.

Neoax is the successor company to White Motor Corp., once one of the nation's largest heavy truck producers. White filed for Chapter 11 reorganization under the U.S. bankruptcy code in 1980.

On Jan. 6, Neoax, based in Stamford, Conn., began a cash tender offer for all of IU's outstanding common shares at a price of $17.50 a share.

Neoax valued the deal at $542 million, based on 27 million common shares outstanding plus another 4 million shares from securities convertible to common shares. The transaction also would include the redemption of 86,000 preferred shares at $102.50 each.

On Sunday, Neoax increased its offer from $17.50 a share to $19 a share, but IU said its board had concluded unanimously that the bid was inadequate and not in the best interests of IU shareholders. The new offer would have been worth $589 million.

In a series of letters sent to IU this month, Mr. Guzzetti has asked to meet with Mr. Christy, but so far no meeting has taken place.

Neoax, an equipment and component manufacturer, produces custom gears for the industrial marketplace and precision machine components for the military.

The company also manufactures custom vehicles, including luxury vans and funeral cars.

A Neoax spokesman said the company was interested primarily in IU's environmental services companies. He said Neoax had not discussed potential

plans for IU's six full truckload motor carriers.

In a public statement Monday, Mr. Christy said IU's board had authorized the company to explore and investigate alternatives that will provide greater value to IU shareholders than the Neoax offer.