Stake Doubled in Zellerbach, Goldsmith Says : Financier Holds 19.6%, Weighs Purchasing More

Anglo-French financier Sir James Goldsmith, who recently dropped a hostile tender offer for Crown Zellerbach Corp. but vowed to continue a proxy fight, said Wednesday that he has increased to 19.6% his stake in the paper and forest-products company.

Goldsmith, who had owned about 9.4% of the San Francisco-based company, said in a letter to its chairman, William Creson, that he had bought an additional 2.8 million additional shares, bringing his total to 5.36 million shares.

The shares were purchased in two privately negotiated cash transactions, he said. He didn’t disclose the price he paid for them. A spokesman for New York financier Ivan F. Boesky declined to comment on Wall Street speculation that Boesky may have sold at least some of his 2 million Zellerbach shares to Goldsmith.

Zellerbach closed Wednesday at $42.50, up $1.125 a share, in composite trading on the New York Stock Exchange.

Larry Kurtz, a spokesman, said that Zellerbach had no comment.

In his letter, Goldsmith said: “We had hoped we could reach a mutually satisfactory understanding with you whereby we could work together to maximize shareholder values, but, unfortunately, we were unable to come to an agreement.” Goldsmith gave the company until Sunday to erase an anti-takeover measure that he claims is illegal. If the company doesn’t act, Goldsmith said, he will consider taking additional steps, including the purchase of more shares.

In addition, Goldsmith said he continues to seek representation on Zellerbach’s board. He said he will support the company’s recently announced restructuring plan.

Goldsmith also said that he filed an amendment to his lawsuit against Zellerbach in New York federal court. The amendment seeks to void all proxies received by the company in connection with its annual shareholders meeting scheduled for Friday. It also seeks to require Zellerbach to schedule a new date for the annual meeting.

Last week, the Nevada Supreme Court overturned a lower court order that Zellerbach delay its meeting until May 23.