Associated Press Photo
Steve Case, AOL's chairman, is about to become
the largest shareholder in Maui Land & Pineapple
The Hawaii-born AOLBy Russ Lynch
chairman is making the buy
as a long-term investment
News that multimillionaire Stephen M. Case, the Honolulu-born chairman of America Online Inc., is about to become the biggest shareholder of Maui Land & Pineapple Co. sent the company's stock soaring today.
MLP's stock rose $6.06, or 40 percent, to close at $21.25, a 52-week high. Earlier in the day, MLP shares went as high as $30.75. The American Stock Exchange shares traded as low as $8.81 cents in late December.
Today's closing price is $8 more than the $13.25 a share that a Case agreed to pay for just under 3 million ML&P shares, according to his spokesman. The shares are being sold by foundations left by the late Honolulu financier Harry Weinberg and managed by the Associated Jewish Community Federation of Baltimore.
Case could not be reached but Jim Whitney, vice president of corporate communications at AOL, said Case is buying a 41.2 percent interest in the company as a long-term personal investment.
"Other than being represented on the board, he will have no role in the company" Whitney said, adding that Case is "supportive of existing management."
Case's plan to spend more than $40 million on the company's shares nevertheless attracted investors to the normally thinly traded stock. About 213,000 shares traded hands today, more than 47 times its average daily volume over the past year, according to Bloomberg News.
ML&P itself has no role in the transaction, said its president, Gary L. Gifford. It is an arrangement between Case and the charities handling Weinberg's estate.
Morton B. Plant, chairman of the Associated Jewish Charities and a director of the Harry Weinberg Family Foundation Inc., said Case approached the foundation to see if the shares were available.
The foundation saw it as a good opportunity to turn a static stock holding into cash that can be used for charitable purposes, Plant said. Case is buying the charity's entire stake in the company. "We've been looking for a way to convert our stock into cash and this offer was made to us," said Plant, who is a director of ML&P, representing the Weinberg interests. The holding wasn't doing much for the charity, he said, and cash can be put to much better use. At the time of Weinberg's death in 1990, his ML&P stock was worth nearly $90 million.
Not very much of ML&P's stock is available for trading. The Cameron family group, relatives of the late J. Walter Cameron, own 35.1 percent, according to the company's last proxy statement, issued in February. Another 7.2 percent is held by a trust for employees of the company.
Case's purchase is subject to approval by regulatory authorities and ML&P stockholders. Gifford said a shareholders meeting will soon be held to vote on it.
Honolulu analyst Randy Havre said he doesn't expect the stock to stay as high as it was today, but even at that price it still represents value.
Today's peak price would give the company a market value of about $180 million. "That's a reasonable value for that company," Havre said.
Case, 40, is the son of prominent Honolulu attorney Daniel Case. He got interested in computers and on-line chatting when he was a student. After marketing positions that included a stint at PepsiCo. Inc., Case joined the company that was to become America Online.
In 1992, Case became AOL chief executive and has since made a personal fortune from AOL stock. AOL's last proxy statement, issued at the end of last September, showed Case holding 3 million AOL shares, worth about $345 million at today's prices.