AFG Partners Made Millions in Failing to Acquire Lear Siegler

Although it failed in both of its attempts to acquire Lear Siegler Inc., the investor group that started the bidding war for the Santa Monica conglomerate two months ago turned a tidy, $46.4-million gross profit for its unsuccessful efforts.

Wednesday, two days after AFG Partners withdrew its second bid for tax reasons, the investors soothed their disappointment with a hefty $8.4-million gross profit from the sale of Lear stock it acquired in its latest acquisition attempt.

Last month, the partnership reported a gross profit of about $38 million when Lear Siegler agreed to be acquired by Wickes Cos. and Wickes bought the partnership’s nearly 1.8 million Lear shares for $91 each. Wickes later ran into trouble financing the deal, and AFG Partners began accumulating more stock for a second run at Lear Siegler.

On Wednesday, the partnership--which bought 850,000 shares last month for $80.09 apiece--sold the stock for $90 per share. Although the price was lower than the $92 per share set by Lear’s agreement to be acquired by Forstmann Little & Co., the partners said they wanted to sell this month so the profits will be taxed at the 1986 rates and not under new tax law.

The partnership, which started pursuing Lear Siegler nearly two months ago, said its profits might be tapped to buy any Lear Siegler divisions that the new owners might put on the market.

“We made some money, and it was a good transaction for us,” an AFG Partners representative said, “but we would have preferred to buy the company.”

AFG Industries, an Irvine glass maker and owner of 50% of the partnership, said it still is extremely interested in Lear Siegler’s Safelite glass division. Wagner and Brown, the Midland, Tex., oil and gas company that makes up the other half of AFG Partners, said it would be interested in buying Lear Siegler’s auto seat, factory equipment and Smith & Wesson handgun operations.

However, investment analysts said it is unlikely that the new buyers would sell Lear’s specialty glass, automotive or factory automation divisions because they are the company’s core businesses.