Goldsmith Gets Financing for Zellerbach Bid
British financier Sir James Goldsmith said Monday that he has lined up $850 million in financing from a group of banks for his hostile takeover bid for Crown Zellerbach.
Goldsmith also filed a lawsuit in federal court here against the forest-products company in an effort to nullify the company’s takeover defenses.
Separately, Zellerbach asked the U.S. District Court in Reno for an injunction against Goldsmith’s takeover bid. The company charged the financier with numerous violations of securities laws.
Zellerbach’s suit alleged that Goldsmith and affiliated entities failed to make required financial disclosures in the tender offer, which is conditioned upon the company’s board neutralizing its “poison pill” shareholders rights.
The complaint also said that Goldsmith’s offer “is so conditional and qualified that it isn’t an offer at all but an illusory, misleading and unlawful device” designed to woo Zellerbach’s shareholders in an upcoming proxy fight.
The financier last week offered to pay $42.50 a share for a majority of Zellerbach’s 27.2 million shares outstanding if the San Francisco-based company rescinded its takeover defenses and if financing could be arranged.
Goldsmith already owns 9.4% of the company.
Zellerbach has urged its shareholders to reject Goldsmith’s offer as inadequate and has refused to dismantle its takeover defenses.
The company’s directors said the long-term value of the company was about $60 a share. The board also said that a major restructuring of the company was expected to be completed within the next year and would improve its financial condition.
“We haven’t seen details on his financing announcement, and we have no comment on that,” said Delos Knight, a spokesman for Zellerbach.
Zellerbach also said the latest suit filed against it by Goldsmith is “without merit and will be vigorously opposed.”
Claims False Statements
The lawsuit claims that Zellerbach filed false and misleading statements with the Securities and Exchange Commission and that the takeover defenses would violate shareholders’ rights by entrenching management and the board of directors.
Separately, New York financier Ivan F. Boesky, a professional investor in stocks of takeover targets, announced last week that he holds a 7.4% stake in Zellerbach.
