Ropak Files Civil Action Against Buckhorn
Ropak Corp., the Fullerton-based maker of plastic containers for agricultural and commercial uses, said Tuesday that it has filed a civil action in Ohio against Buckhorn Inc., seeking to force the company to rescind certain so-called poison pill anti-takeover measures.
Ropak also said it has extended its tender offer for Buckhorn shares until Feb. 6.
The suit, part of Ropak’s increasingly complicated attempt to acquire Buckhorn, claims that the Milford, Ohio-plastic container maker is trying to keep Ropak from gaining control by making an acquisition prohibitively expensive. The actions were taken, the suit says, after Ropak’s initial all-cash tender offer was made. Ropak is offering $4 per share for Buckhorn’s common stock and $5.75 per share for its preferred stock.
William M. Curtis, Ropak’s attorney, said the company objects to the adoption by Buckhorn of “golden parachutes” that give seven of its executives the right to lump sum payments equal to three times their annual compensation in the event of a takeover. The suit also objects to Buckhorn’s granting of new stock options to several executives and to a decision to extend the employment contract of Buckhorn’s president by four years and to boost his salary by 50%.
The suit is a counteraction to Buckhorn’s Nov. 28 complaint claiming that Ropak did not provide proper disclosure of the financing it needed to fund the tender offer, Curtis said.
Buckhorn executives were not available for comment Tuesday. However, in a letter sent to Buckhorn stockholders, Richard Johnston, the company’s president and chairman, said that the Buckhorn suit “seeks a preliminary and permanent injunction prohibiting Ropak from proceeding with its tender offer” because of “omissions and misrepresentations” in documents filed by Ropak with the Securities and Exchange Commission. Johnston also claims in the letter that Ropak’s offer is too low.
The Dec. 8 letter, which urged stockholders to reject Ropak’s bid, claimed that if Ropak obtains the minimum 55% of Buckhorn’s stock it seeks, it then could refuse to purchase the remaining stock.
Ropak said that 327,780 common shares and 343,685 preferred shares of Buckhorn stock had been tendered by the original Dec. 22 expiration of its tender offer. That would have given Ropak only 19.9% of the company, which has 1.5 million shres of preferred stock and 1.85 million shares of common stock outstanding. The tender offer deadline has been extended to Feb. 6 because of the suits, Ropak said.
