A New Jersey businessman's on-again, off-again attempt to buy MHP Machines Inc. of Cheektowaga is back on again.
MHP announced Wednesday that it has agreed to let Eastern Shore Consolidated Industries Inc. of Pequannock, N.J., acquire a 51 percent stake in the local company through a tender offer for 50 cents a share.
The new deal, which is expected to be completed within two months, is the third attempt to acquire the Cheektowaga machine tool company that has been made by firms headed by Robert DeGeorge Sr.
Based on MHP's 1,084,776 outstanding shares, the proposed deal would be worth $276,600, which is substantially less than DeGeorge's original $1.19 million offer for the firm, although those two deals are not directly comparable.
DeGeorge originally tried to acquire MHP last September through another one of his companies, R&D Manufacturing Co. R&D signed a letter of intent to acquire MHP, but that deal fell apart in December after a definitive agreement could not be reached.
R&D's sister company, NASA Machine Tools Inc., which also is controlled by DeGeorge, then offered in December to acquire MHP's stock in exchange for certain assets in the Cheektowaga company. NASA, however, withdrew that offer in February.
Under the tender offer announced Wednesday, MHP's board of directors has agreed to allow Eastern Shore, a shell corporation controlled by DeGeorge, to make a tender offer for 51 percent of the Cheektowaga firm's stock.
If less than 51 percent of the stock is tendered, MHP's directors have agreed to authorize the company to issue enough shares of its common stock to Eastern Shore so that the New Jersey firm still would be able to acquire a 51 percent stake. Any additional shares issued by MHP would be priced at 50 cents per share.
DeGeorge refused to comment on what plans he has for MHP once the tender offer is completed. "The plans have not been formulated as to what we're going to do," he said. Michael Mortimer, MHP's president and chief financial officer, could not be reached for comment.
MHP and NASA are in similar businesses and are competitors in some lines. NASA, which also is based in Pequannock, makes computer-numerically-controlled machine tools. MHP makes metal-cutting computer-numerically-controlled machining and turning centers.
NASA puts the final electronics into many of its products, which initially are manufactured elsewhere, while MHP completes more of the manufacturing of its tools.
MHP also reported that it had a net loss of $376,000, or 35 cents a share, during the second quarter ended March 31, compared to a profit of $52,000, or 5 cents a share, a year earlier. Sales fell 38 percent to $2.55 million from $4.14 million.
MHP said its total backlog increased to $1.69 million on March 31, up from $1.34 million a year earlier.