Hixons/24″/dt1st/mark2nd
By DANIEL TAUB
Staff Reporter
Pasadena’s Hixon family is one of the nation’s richest families, with an estimated $1.1 billion in assets. And for years, they’ve kept their business pretty much to themselves.
But that changed last week when the family opened a small but revealing window into its world by releasing a copy of a shareholder’s letter authored by the family executive committee.
The letter reveals a split between most family members and Joseph M. Hixon III, a descendant of now-deceased Hixon family patriarch Robert Hixon.
Robert Hixon was one of the original investors in AMP Inc. a Harrisburg, Penn.-based electronics company whose stock still makes up the bulk of the family fortune.
In early August, Morristown, N.J.-based AlliedSignal Inc. made a hostile $10 billion takeover bid for AMP.
Joseph Hixon, the only family member who sits on AMP’s board and who holds a 0.8 percent stake in the company wants to fend off the bid.
The rest of the family, which collectively is the second-largest shareholder with a 4 percent stake, wants to cash out.
Three Hixons patriarch Alexander P. Hixon and his grandson Dylan H. Hixon, who are based in Pasadena, and Benson K. Whitney, a Minneapolis venture capitalist and attorney signed a two-page letter to AMP’s board detailing their opposition to the resistance.
“Preserving AMP’s independence at all costs hurts its long-term shareholders like the Hixon family most,” wrote the family. “We thus implore the AMP board of directors to listen to its owners and negotiate with AlliedSignal now, or seek a better transaction to maximize shareholder value.”
The letter comes on the heels of a sizable decline in AMP’s stock. Last week it was trading at $36 a share, down almost 33 percent from a year ago.
The letter serves as a pointed rebuke to Joseph Hixon, who as a member of the AMP board voted in favor of a stock buyback plan and who supports legislation making its way through the Pennsylvania Legislature that would make it harder for AlliedSignal to take over the company.
“Joe is not a part of this,” said Pascal Levensohn, president of San Francisco-based Levensohn Capital Management LLC and the Hixon family’s financial adviser. “Joe is a director of the company, and he has to discharge his fiduciary duties to his shareholders as he sees fit.”
Levensohn said that the Sept. 29 letter does not reflect a change in the family’s desire to maintain its privacy, but rather was a result of unusual circumstances.
“I think it would be fair to characterize the AMP situation as extraordinary in every respect, because the nature of the tactics that the company has used are really subversive of the free-market forces that brought people like the Hixons to found AMP 50 years ago,” Levensohn said. “I think it would be unreasonable to expect the Hixons to depart from their normal, low-profile position in the future.”
Even last week, Alexander Hixon and other family members including George Hixon, chairman of San Antonio, Texas-based Hixon Properties Inc. did not return calls for comment.
Levensohn said the letter speaks for itself: The family disagrees with the tactics AMP is using to try to block the takeover bid by AlliedSignal. In particular, the family opposes the stock buyback plan that would give management greater control over the company but add to its debt.
Jeffrey Heil, an investment officer with the University of California system, which owns about 6.5 million shares of AMP stock, said he was surprised by the Hixons’ letter given the family’s low profile but that the circumstances justified it.
“It’s quite warranted. This is the most hostile position the company has taken against its shareholders in quite some time,” he said.
Alexander Hixon, 83, a nephew of original AMP investor Robert Hixon, and his wife, Adelaide, have been active philanthropists in the L.A. community over the years. They are founding members of the Museum of Contemporary Art and have donated to KCET-TV Channel 28, the Music Center and Huntington Memorial Hospital.
Their grandson, Dylan Hixon, holds a bachelor’s degree in engineering from Yale University and a master’s degree in engineering from the California Institute of Technology. He is a special-effects engineer in the motion picture and television industries, Levensohn said.
Alexander and Dylan Hixon along with Whitney, a great nephew of Robert Hixon, and outside attorney Dennis Block make up the family’s executive committee, which oversees family financial decisions, Levensohn said. AMP stock is said to be divided among some 70 Hixon family members, but even Levensohn doesn’t know the exact number.
“I cannot say I’ve found every Hixon in the world,” Levensohn said, adding that members live throughout the U.S. “It’s a large family and a lot of them are represented.”
AlliedSignal’s effort to take over AMP will likely rest on whether the anti-takeover bill is passed and signed by the governor and what the final language might be. AlliedSignal officials said they would wait to see the final legislation before making a decision on how to pursue the AMP takeover effort.
