Griffin Raises His Bid; Trump Refuses to Bite
Television producer Merv Griffin sweetened his bid for Resorts International by 31% to $295 million on Tuesday. But he left the door open for most of the $70-million increase to go to Donald Trump, owner of about 95% of the controlling Class B shares.
Although the move drove the price of the casino firm’s stock up another $3.625, closing Tuesday at $32.25 in heavy trading on the American Stock Exchange, the New York financier himself did not find the bait enticing.
Trump said that unless Griffin will limit his offer to the Class A stockholders, Trump will go ahead and complete his $22-a-share tender offer.
Thereafter, he said, he will propose a merger for $22 a share in cash for all stock not tendered. He said his voting control would assure the merger’s success. Class B shares have 100 times the voting power of Class A shares.
Appraisals Evaluated
Griffin last Thursday offered $35 a share, or $225 million, for all Resorts shares, including Trump’s Class B shares acquired last year for $135 each. In reporting his new lump-sum bid for Resorts on Tuesday, Griffin said he would not approve any deal between Resorts and Trump “unless Class A shareholders receive a premium over my prior $35-per-share offer.”
In other words, a Griffin spokesman said, the $295 million conceivably might be split with $36 a share to be paid for the 5,679,411 Class A stock and about $120 each to go for the 752,297 Class B shares. This would be about $15 a share less than Trump paid for his stock.
A spokesman for Merv Griffin’s wholly owned Griffin Co. said the sweetened proposal resulted primarily from an evaluation of appraisals on the value of Resorts, which the company received after it made its original offer last Thursday. Unless approved by the Resorts board, the current offer is to expire April 6.
Trump said that if Griffin were serious about buying Resorts’ Class A stock, he should drop two conditions that make it “impossible” for Griffin to succeed.
Those conditions are that Trump sell his Class B stock to Griffin and that Trump agree to cancel his management contract with Resorts. The controversial contract calls for Trump to manage Resorts for 1.75% of its revenues and 15% of its profits, generating a fee estimated at more than $10 million a year.
“Mr. Trump’s statement is ludicrous, grossly misleading and in no way a meaningful solution,” a spokesman for Griffin Co. rejoined. “We reiterate that we are trying to buy the entire company.”
Meanwhile, a 6% shareholder of Resorts Class A stock, F. V. Scutti, disclosed Tuesday that he has obtained an option to buy 106,907 of the shares held by an institutional investor, Tweedy, Browne & Co. of New York. The firm earlier had withdrawn its support for a settlement of stockholder suits against Trump in exchange for raising his bid to $22 from $15.
In a filing with the Securities and Exchange Commission, Scutti confirmed that he granted Griffin Co. an option on some of his Resorts stock. The filing said that option was to purchase 160,050 of his Class A shares at $22 each “if Griffin made the offer.”
William Klein II, New York attorney for Tweedy Brown, said in an interview Tuesday that the investment firm represents nine pension funds and “feels strongly” about its fiduciary duty to consider the higher Griffin offer.
