Pennzoil Co., the Houston oil company that owns an 82.4 percent share of Jiffy Lube International Inc., is offering to buy the remaining 1.53 million shares at $6 each, for a total of $9.2 million.
Jiffy Lube yesterday closed at $4.50 a share, down 50 cents. Pennzoil’s offer was announced after the market closed.
The action would complete the takeover of the former Baltimore company, which Pennzoil rescued from a sea of red ink in late 1989. At that time, Pennzoil bought 80 percent of Jiffy Lube for $35 million. During the first half of 1990, the headquarters was moved from Baltimore to Houston.
The purchase, which would make Jiffy Lube a wholly owned subsidiary of Pennzoil, would simplify its operation and make it more efficient, according to Pennzoil spokesman Robert G. Harper.
The tender offer will begin on Aug. 5 and will expire on Sept. 3, Harper says. The offer is contingent on Pennzoil’s acquiring at least 660,000 of the outstanding shares, which will give the oil company control of more than 90 percent of the stock.
W. James Hindman began Jiffy Lube in 1979 with only eight stores and built it into the nation’s dominant quick-lube chain with about 1,000 outlets. But in the process, the company accumulated a debt of more than $150 million that put it into financial straits.
Hindman is no longer associated with the company.
During the second quarter, Jiffy Lube lost $4.5 million, or 52 cents a share, compared with a loss of $3.7 million, or 43 cents a share, during the 1990 second quarter. Second-quarter revenues were $29.6 million, 22.3 percent higher than the same period a year ago, when revenues were $24.2 million.
In the first six months of this year, Jiffy Lube had a loss of $9.3 million, or $1.07 a share.