SAN DIEGO COUNTY : Company Would Move to Colorado : Layoffs Expected at Monitor If Lear Siegler Merger Succeeds

SAN DIEGO —  Layoffs are expected at Monitor Technologies if the company’s plan to merge with Lear Siegler Measurement Controls of Englewood, Colo., through an $8-a-share tender offer is successful.

Monitor Technologies Chairman Kenneth Years said plans call for the San Diego-based manufacturer of air-pollution monitoring equipment to be moved to Englewood from its current Scripps Ranch base of operations after the completion of the tender offer. Just how many of Monitor’s 100 employees will be affected by the move has not been determined, he said.

Lear Siegler’s tender offer, announced by both companies late Tuesday, would be worth $15.9 million, Years said. Monitor now has about 1,987,000 shares outstanding. The tender offer commenced Wednesday and will expire Aug. 15 unless extended.

Monitor stock closed up $1.50 at $7.625 a share in over-the-counter trading Wednesday. The stock has sold for as low as $3.875 over the past year.

Describing Lear Siegler’s offer as “not a fabulous price but a reasonable price,” stock analyst Larry Selwitz of Cruttenden & Co. in Newport Beach said he doubts that a competing tender offer will arise.

“I really don’t anticipate a bidding contest,” Selwitz said. Monitor “has about a $4-per-share book value, and I don’t know if anyone else is willing to pay two times book value for Monitor. (The firm’s) growth rate is 8% to 12% a year, which is really no great shakes.”

Board Approved Merger

Monitor’s board of directors approved the merger Tuesday, the same day that Lear Siegler signed option agreements with all but one of Monitor’s directors and officers to buy their stock. Monitor’s officers and directors own 13.7% of the outstanding Monitor shares.

Among the executives signing the option agreements with Lear Siegler was Years, who owns about 10% of the company’s stock, a holding now worth more than $1.5 million. Years said he expects to resign from the company once the tender offer is completed.

Although Years would not receive a “golden parachute” or cash settlement from Lear Siegler, he said the Colorado company would honor his $145,000-a-year employment contract through the end of 1990.

Mercury Asset Management Group, a British investment firm that recently disclosed that it owns more than 8% of Monitor shares, has not signed an option agreement with Lear Siegler, Years said.

Although small and growing slowly, Monitor Technologies has been steadily on the rebound since 1986 when it lost $2.4 million on sales of $9.6 million after abandoning an automated inspection product line. For the fiscal year ended Dec. 31, Monitor reported a $1.8-million profit on $11.1 million in sales. For the first quarter ended March 31, Monitor posted a $282,366 profit on sales of $3.2 million.

The company’s outlook brightened recently after President Bush disclosed his environmental initiative that could lead to tougher pollution controls and perhaps more demand for Monitor’s equipment. More than 80% of Monitor’s equipment is now sold overseas, particularly in Europe, where more stringent monitoring controls are already in place.

Years said the merger with Lear Siegler is a good fit because Lear Siegler makes equipment that monitors continuous pollution emissions from smokestacks and Monitor’s machines measure ambient or atmospheric pollution. Lear Siegler is strong in domestic markets, while Monitor’s strength is in exports.