Sosnoff Urges Caesar Stockholder Vote Delay

Martin T. Sosnoff launched a mail campaign Thursday to block a June 12 stockholder vote on Caesars World’s $971-million recapitalization plan, as well as on anti-takeover measures that he contends could be used to defeat his tender offer. He has bid $35 a share for the Los Angeles-based casino operator.

In a proxy solicitation to all Caesars shareholders, the New York money manager asked for a majority vote at the outset of the June 12 meeting for postponing those matters to June 24.

Sosnoff’s proposal also would seek further day-to-day postponements of voting on those matters until after he has a chance to buy shares tendered to him, but no later than July 7.

The proxy disclosed that Caesars’ management several days ago rejected his request that it put off any action to carry out the recapitalization, if approved, until after the results of his tender offer are announced. Sosnoff’s deadline for his tender offer is June 19.

Meanwhile, attorneys for Sosnoff and the company argued before a federal judge here late Thursday that their opponents had committed securities law violations by putting out false and misleading information in their battle over Sosnoff’s attempted takeover.

Sosnoff, the company’s largest shareholder with 13.7% of its stock, Wednesday had increased to $35 from $32 his per-share offer to increase his holding to 85.6%. The offer also includes a 30% equity interest in the company in the form of preferred stock.

According to the proxy material and sources close to the situation, Sosnoff fears that if a vote on management’s plan is taken before stockholders know the results of his tender offer, they might vote for management’s plan in order to make sure of getting at least $26.25 a share cash. That is the amount the company proposes to be paid as a special dividend in a recapitalization.

Sosnoff is reported to fear, too, that stockholder approval of management’s anti-takeover measures June 12 would be put into effect immediately by Caesars management to keep him from completing purchase of stock tendered to him.

One of the measures, a so-called fair-price provision, requires an 80% vote of shareholders to approve certain transactions with interested shareholders holding as much as 15% of the company’s stock. This alone could be an insurmountable barrier to Sosnoff’s tender offer.

On June 1, according to his proxy, Sosnoff received from Caesars Chairman Henry Gluck a letter informing him that the board of directors had decided not to comply with his May 22 written request not to hinder completion of his tender.

Citing the reasons, Gluck’s letter said in part: “Obviously if shareholders prefer the plan of recapitalization they will vote for it and if they prefer your tender offer, they will vote against the plan of reorganization . . . We believe that any further delay is simply not in the best interests of all shareholders.”

Sosnoff Has Commitments

The proxy also said Sosnoff has commitments for up to $975 million of financing from a syndicate of financial institutions and the sale of preferred stock of his MTS Holding Corp. Marine Midland Bank has said it will be able to deliver commitments for another $25 million financing.

During court arguments here Thursday, Caesars World attorney Frank Rothman disclosed to Judge William J. Rea that Caesars has now settled all nine stockholders’ class-action lawsuits filed last March against the company. Among other things, the suits accused the company’s directors of seeking to enrich themselves by the plan of recapitalization.

A Sosnoff attorney, Robert Jocelyn, also told the court that he understands the company agreed to pay $1 million in fees to the suing parties’ lawyers as part of the settlement.