$93 Million Italian Bid For Litco

By ROBERT A. BENNETT

The Banca Commerciale Italiana, a major Government-owned Italian bank, has offered $93 million to purchase the Litco Bancorporation of New York, the largest domestically owned bank on Long Island, it was announced yesterday.

Arthur Hug Jr., Litco's chairman, said that he would recommend to Litco's directors that they accept the offer. The Italian bank is offering $35 a share, or about three times what Litco stock had been selling for several weeks ago before the company announced that several foreign banks had expressed interest in buying the Long Island company. The stock closed at 27 on Thursday and at 281⁄2 yesterday in trading on the New York Stock Exchange.

"We believe Litco will provide us with a significant presence in the United States," Innocenzo Monti, B.C.I.'s chairman said in the press release sent out by Litco, whose principal holding is the Long Island Trust Com pany. The bank has 46 branches, mostly in Nassau and Suffolk counties.

The price being offered by Banca Commerciale, the 35th-largest bank in the world, with assets of more than $31 billion, is one-and-a-half times Litco's book value. Mr. Hug said that if the book value of Litco increases between the end of last month and the close of the fiscal quarter immediately preceding the acquisition, the price paid would be raised.

The price being offered is 18 times

NEW YORK TIMES April 4, 1981

earnings. Banca Commercial, according to Mr. Hug, has also promised to inject an additional $20 million into Litco's equity, once the acquisition is completed.

"I am convinced that the merger with B.C.I. will provide numerous advantages to Litco," Mr. Hug said.

In February, he announced that he had had "conversations with several separate" parties that had expressed interest in buying Litco.

One of those was reported to have been Chang Ming Thien, chairman of the Overseas Trust Bank in Hong Kong.

Over the years, a number of other foreign interests, including Barclays Bank, have sought to obtain control of Litco. The Barclays bid was accepted by the bank but turned down by the Federal Reserve Board on antitrust grounds.

In addition, Bruce Rappaport, a Swiss shipowner, acquired a 10 percent interest in the bank several years ago. According to banking sources, in an effort to prevent Mr. Rappaport from gaining control, Mr. Hug arranged to have two Italians acquire a total of 15 percent of Litco's outstanding shares. Chemical Turned Down

But Willard C. Butcher, president of the Chase Manhattan Bank, and Donald C. Platten, chairman of the Chemical Bank, said in telephone interviews yesterday that the proposed takeover of Litco, which has $1 billion in assets, was another example of the advantage foreign banks had over American bariks in acquiring banks in the United States. In the late 1980's, Chemical sought to acquire Long Island Trust but was turned down by the regulatory authorities for antitrust reasons.

"While we don't begrudge Banca Commerciale Italiana for a moment the opportunity to acquire the Long Island Trust Company, it's just another good example of the attitude that what is permissible for foreign banks to do is not permissible for American banks," Mr. Butcher said.

Last year, Litco earned $3.1 million, compared with $6.1 million the previous year. Several weeks ago three shareholders, including Nathan Cummings, the honorary chairman of the Consolidated Foods Corporation, formed a dissident shareholders group and declared to the Securities and Exchange Commission that they planned to introduce their own slate of candidates to fill four empty seats on the Litco board.

According to Albert I. Edelman, partner in Trubin, Sillcocks, Edleman Knapp, attorney for the group, Mr. Hug asked the group to withdraw its own state because this would have made it more difficult to arrange for a

foreign takeover. A compromise was 'reached, Mr. Edelman said, in which John J. Randall 3d, a lawyer on Long Island and one of the three dissident stockholders, was named to the board. The third dissident was Eugene D. Fanning, who owns a large Cadillac dealership in Illinois.