Telex Corp yesterday came up with a bizarre recapitalisation plan that would give shareholders $45 in cash and $15 in the junkiest of junk bonds for each share they hold – and they would also retain their shares. The plan, which seems to be designed to give Telex holders something to look forward to, would be put to a shareholder vote – probably in January – only in the event that Edelman does not proceed with his $65 a share cash offer promptly. Telex said it expects to raise about $775m, which would be needed to pay the $45 cash dividend, to refinance existing debt and to pay the expenses of the recapitalisation, through bank borrowings of about $475m and the public sale of about $300m of senior subordinated and subordinated debt. It also said it expects the junior 15-year subordinated debentures would pay interest at 16.25%, interest being paid in additional debentures for the first five years, in cash thereafter. Asher Edelman said the status of the financing for his offer remains unchanged and that in view of the pending litigation over alleged violation of securities laws, he had not yet asked for firm funding commitments. He has extended the offer to November 9 and any further extensions will be made from day to day thereafter. Telex shares opened up $4.25 at $57.75.
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