The hay tool and skid-steer manufacturing business is a bit dirtier since billionaire corporate raider Harold C. Simmons started lobbing dirt clods at Gehl Equipment Company. Last December, Simmons, on behalf of a group of disgruntled activist shareholders, started voicing his intention to buy the West Bend, WI, based manufacturer. Meanwhile William D. Gehl, the company’s chairman, chief executive, and grandson of the company founder, had until recently insisted that his company was not for sale. According to Gehl, Simmons didn’t really want to buy the company, but was instead trying to drive up the price of Gehl stock.

If price pumping was Simmons’ intention, the strategy has succeeded. Before the buyout rabble got serious, shares of Gehl wallowed at about $10/share. Recently the price rose above $17, with Simmons and his partners Paul DeRobbio and Mark E. Schwarz saying they intend to own the company at $18/share. The takeover trio currently owns 6.4% of Gehl’s stock.

Now the threat of a bona fide takeover appears more real after an official announcement from Gehl on May 9. In that press release, the company changed its position on selling, saying it will seek “strategic alternatives” to maximize shareholders’ value, including a potential sale of the company. In doing so, Gehl opened itself to accepting other offers, which will likely force the raiders to make an official tender offer or withdraw their takeover bid.

Exactly what Simmons and his partners intend to do with Gehl if they can buy it is still a matter of speculation. It might be the classic corporate raid, in which Simmons used to specialize. Going back to an article in the March 27, 1990, issue of the Los Angeles Times, it appears that Simmons typically targeted companies with assets that could be divided and sold off. These pieces included “over-funded” pension plans. The takeover typically resulted in the liquidation of plan assets and their partial replacement with less-valuable annuities. In the 1980s, Simmons legally looted more than $200 million from the pension funds of Amalgamated Sugar, Baroid and NL Industries.

On the other hand, some Wall Street analysts think Simmons, whose net worth already exceeds $1 1/2 billion, may be intending to build instead of tear down this time around. According to financial analyst reports, word on the Street is that Simmons intends to use Gehl as a foundation for putting together a large equipment manufacturing and rental company. If true, this scenario leaves one looming question: What equipment company will the raider target next?

To learn more about Gehl Company, go to www.gehl.com.

For more details about the Gehl takeover saga, go to www.napeague.com/CAM-GEHL-5-6-01.html.