Suitor Strikes Deal to Sell Ground Out From Under Company It Has Targeted

How do you sell a company’s headquarters and 22 acres you don’t own? Better yet, for $57 million?

A New York investment group has more or less done it. The group, DPC Acquisition Partners, announced Tuesday that it struck a tentative deal to sell Dataproducts Corp.’s headquarters in Woodland Hills and the land Dataproducts owns there to Trizec Properties, a big Canadian real estate company.

But there’s a catch: DPC first must gain control of Dataproducts. So far, DPC has made no formal offer for the the nation’s largest independent maker of computer printers.

“It’s like saying I’ll sell Buckingham Palace if I ever own it,” said William D. Easterbrook, an analyst with Kidder, Peabody & Co.

DPC is led by John K. Castle, the former chief executive of the Wall Street firm Donaldson, Lufkin & Jenrette. The group owns about 7% of Dataproducts’ stock and has said it wants to gain control of the company.

Dataproducts has spurned the group’s overtures so far. But Castle said DPC plans to make a formal bid once it receives information being prepared for prospective buyers by Dataproducts’ investment bankers.

Castle added that his group disclosed the tentative deal with Trizec because the U.S. Securities and Exchange Commission requires that such developments be made public. Trizec declined to comment.

Dataproducts has been considered a prospective takeover target for three years, in part because of its valuable property and other assets. The land includes two parcels of about equal size in the Warner Center area. In addition to the headquarters building, Dataproducts has engineering and manufacturing facilities on the sites.

The chairman of Dataproducts, Jack C. Davis, would not comment on DPC’s announcement. But, he said, “We believe we have a better sense of all of our assets, including our real estate assets, than any outside organization.”

All the same, DPC may have negotiated a good sale price for Dataproducts’ real estate.

Seth Dudley, who manages the Encino office of the Julien J. Studley Inc. commercial real estate firm, said he estimates the Dataproducts property is worth $40 million. He said he is surprised anyone would pay $57 million.

“That is the absolute top end. You had better be damn sure you can develop it to the maximum,” Dudley said.