Steinberg Plan Sends Mercury Shares Higher

Mercury International Group PLC shares continued to gain Thursday, after its minority shareholder, New York investor Saul Steinberg, said that he plans to increase his stake.

The London-based Mercury, which owns S. G. Warburg and Co., one of Britain’s biggest merchant banking houses, said Wednesday that Steinberg plans to raise its holding to more than 15%.

Steinberg, operating through Reliance Group Holdings, a large U.S. insurance company, currently holds 10.44% of Mercury. Last November, he agreed to keep his stake at that level. He disclosed his plan to increase his Mercury stake in a routine antitrust filing with the Justice Department and the Federal Trade Commission in Washington.

Mercury said in a written statement that it has also received notification from Reliance that a Reliance subsidiary will buy the additional shares, subject to availability and price.

“The notification now received indicates an intention on the part of Reliance no longer to be bound by the November, 1985 agreement,” the Mercury statement said.

A New York spokesman for Steinberg and Reliance said, however, that the entire basis of the November agreement “was the assurance by Mercury’s management that it was committed to the principle of maximizing shareholders’ value.”

Because of that agreement, Reliance limited its holdings and offered suggestions for enhancing the value of Mercury’s shares, the spokesman said.

“We have been both patient and cooperative,” the spokesman said. “Unfortunately, Mercury has been neither open-minded nor receptive to our suggestions, and it does not appear that the board or management had any plans of their own to enhance shareholder value.”

“We are disappointed that now, after the fact, Mercury seeks to change the nature of our understanding. Under the circumstances, Reliance believes it has no choice but to do whatever it concludes to serve the best interests of Mercury and its shareholders,” the spokesman said.