Trump Scraps Offer for More Resorts Stock : Vows Offer by Griffin ‘Will Never Be Approved’

New York financier Donald J. Trump said late Wednesday that he is abandoning his $22-a-share tender offer for the Resorts International stock that he does not own. He will return all tendered shares after his offer and merger agreement expire at midnight tonight, he said.

Trump also declared that takeover offers for Resorts by Hollywood producer Merv Griffin “can never be approved and will never be approved.” Trump reiterated that he will not sell his Class B stock, which gives him 88% voting control of the casino firm, and that he will not pay more than $22 per share for Class A shares.

The statement came after the close of trading on the stock market, where Resorts Class A shares had risen another 87.5 cents to close at $30.50 on the American Stock Exchange. The price stood at $21.875 before Griffin began bidding for Resorts on March 17.

Earlier Wednesday, Griffin’s investment firm unwrapped a new takeover proposal for Resorts that attempted an end run around Trump.

Lawyer Disagrees

Griffin Co. contended that Delaware law “obligates” a special committee of Resorts’ outside directors to accept the new offer. Further, Griffin said the committee can do so without the consent or vote of controlling shareholder Trump.

Trump lawyer Jack H. Nusbaum scoffed at the idea, saying: “Like all the others, it is subject to Trump’s approval.” Nusbaum called the latest proposal “misleading and illusory.”

At the heart of the Griffin maneuver is an offer of $36 a share for 1.2 million authorized but unissued Class B shares, which would give Griffin more voting power than Trump has.

Trump controls Resorts with about 710,000 shares of the 752,297 Class B shares outstanding, which have 100 times the voting power of Class A shares. Last year, Trump paid $135 a share for the Class B shares to acquire control of Resorts.

Under Griffin’s latest offer, holders of the 5,679,411 Class A shares also would receive $36 a share.

Griffin Co. delivered its offer in a letter to Resorts’ special committee of three outside directors, saying the committee’s approval was the “primary condition” of the proposal.

In the letter, Griffin Co. said it believes that three other directors, including Trump, are “interested” parties because of their competing offer for Resorts stock that Trump does not already own.

“Accordingly,” the letter said, “it is our understanding that under Delaware law the three remaining Resorts directors have the power, authority and, indeed, the obligation to approve this offer and that it is capable of consummation without the consent or vote of Mr. Trump or his associates.”

The letter said that Trump, by making his offer, put Resorts “into play” and that it was then “obligatory” that the directors conduct a “fair auction” for the company.

The special committee has declined to consider Griffin’s two previous bids.

Trump’s statement Wednesday said Griffin’s “illusory” offers “have created such confusion in the marketplace that extending my tender offer would only serve to compound the confusion.” He said all shares tendered and not withdrawn will be returned to shareholders.

Trump said his primary reason for wanting to take Resorts private had been to enable the company to finance the completion of its huge Taj Mahal hotel-casino project in Atlantic City, N.J., at “the most economically available rates.”