Sweetheart Cup Co., a major Baltimore County employer that said last summer it was considering a public stock offering and merger offers, will remain a privately held, independent company.
Daniel M. Carson, Sweetheart's vice president and general counsel, said the company had held "substantive discussions" with prospective investors whom he would not identify. But he said Sweetheart's board of directors decided last month against a sale or public stock offering.
"With continuing success in the execution of our business plan, our ownership expects the value of our company to increase and that Sweetheart will strengthen its leadership position in the industry," the company said in a statement issued in response to questions about its future.
Sweetheart, which employs 8,000 throughout North America, is the nation's largest maker of plastic and paper cups, plates, cutlery and ice cream cones. The company has about $845.5 million in annual sales.
Owned by American Industrial Partners Capital Fund, it is one of the five biggest employers in Baltimore County. About 2,200 work at its Owings Mills factory and corporate headquarters.
When AIP bought Sweetheart in August 1993, it adopted a strategy of boosting profits, shrinking the work force and spinning off a healthy company in a public stock offering by 1997 or 1998. AIP turned the company around in a year, making 1994 Sweetheart's first profitable year since 1989.
Speculation about a takeover grew intense in June, when Tenneco Inc. said it would buy Amoco Corp.'s plastic container division, which makes polystyrene cups, plates, carrying trays and other products. Greenwich, Conn.-based Tenneco had made no secret of its intent to expand further in the packaging business.
That was reinforced in July, when William McLaughlin, Sweetheart's president, said that the company had received "unsolicited expressions of interest" from outsiders, whom he wouldn't name.
He said the company was exploring those possibilities as part of its responsibility to investors, which include AT&T; and General Motors pension funds. McLaughlin also said that the company might take no action at all.
In its statement yesterday, the company said it had made "significant progress" by cutting costs and improving information management, customer service and manufacturing.
Company officials did not release any additional information about Sweetheart's long-term plans.
Early this year, the company received a $200,000 state training grant. Sweetheart also received a $1.08 million loan from Maryland that will become a grant if the company meets several criteria, and Baltimore County has committed an additional $120,000 with the same strings attached.
The criteria include the retention of 2,000 jobs, the addition of 50 upper-management positions, the investment of $30 million in the company's Owings Mills facility, installation of new printing equipment and keeping the company's headquarters in Maryland.
Pub Date: 12/04/96