GenCorp Chairman Says No ‘Greenmail’ to Be Paid

GenCorp Chairman A. William Reynolds told shareholders Tuesday that the Akron conglomerate would announce its anti-takeover strategy within a week and pledged that the plan would not include a “greenmail” payment to its unsolicited suitors.

Speculation that the company will pursue a stock repurchase to fend off the would-be buyers received another boost Tuesday when GenCorp confirmed that its $387-million sale of television station WOR in New Jersey would become final Friday.

Before the takeover battle began last month, GenCorp had planned to use the proceeds from the WOR sale to repurchase stock from its shareholders as a protection against an unwanted takeover.

Reynolds told shareholders at Tuesday’s annual meeting in Akron that the company’s directors were considering several alternatives to fend off General Partners, an investor group that launched a $2.2-billion hostile takeover two weeks ago. Options, he said, include a corporate restructuring, a leveraged buyout or stock repurchases.

However, Reynolds stressed that greenmail, the purchase of shares from the would-be buyers at a premium price, “is not one of the options being considered.”

General Partners is a joint operation of Irvine-based AFG Industries and Wagner & Brown of Texas.