New World Bid Stalls in Courts

New World Entertainment lost a round in Massachusetts courts Tuesday in its $401.8-million bid to buy Kenner Parker Toys.

In separate rulings, a U.S. District Court judge in Boston denied New World’s plea to block enforcement of a Massachusetts anti-takeover law, and a Superior Court in Beverly, Mass., refused to void an order it issued last week blocking the company from buying any more Kenner Parker stock or launching a tender offer.

In Los Angeles, attorney Eric Waxman, representing New World, said the company plans further appeals to challenge the constitutionality of the Massachusetts anti-takeover law.

Los Angeles-based New World last month disclosed its intention to merge with Kenner Parker of Beverly, Mass. Kenner Parker rejected the $41-per-share offer, and New World said it intended to launch a hostile tender offer.

However, a decade-old Massachusetts law prohibits hostile tender offers for one year unless a company discloses its intention before acquiring 5% of the target.