Macmillan’s Board Will Consider Selloff to Thwart Unsolicited Bids

Macmillan Inc., the target of a pair of unsolicited takeover bids, said Friday that its board has authorized management to evaluate the possibility of selling all or parts of the company and other options.

The publishing and information services concern said the board gave those instructions as it voted to oppose a tender offer from a group led by Texas investor Robert M. Bass that values the company at $1.9 billion. The board called the bid inadequate.

Macmillan said its board authorized management to explore a variety of alternatives, including another version of its proposed restructuring that has been tied up in court, a merger or the sale of all or parts of the company.

In a filing with the Securities and Exchange Commission, Macmillan said it had discussed with unidentified third parties “their interest in a possible acquisition of all or part of the company” but that no negotiations occurred.

The company said it had provided confidential information to one third party and might provide information to others, and said it could engage in negotiations in the future.

But at the same time, the company said the board reaffirmed its intention for a vigorous appeal of a Delaware court decision that blocked implementation of its restructuring plan. The company said the appeal would be heard Aug. 15.

The announcement of the board’s rejection of the $75-a-share tender offer launched last week by the Bass Group came as no surprise.

British entrepreneur Robert Maxwell already indicated that he was prepared to offer $80 a share under certain conditions for all of Macmillan’s 25.9-million shares, or about $2.06 billion.

On Wall Street, traders anticipated that the bidding for Macmillan might go higher. Macmillan rose 87.5 cents a share to $84.625 in composite New York Stock Exchange trading.

Bruce Thorp, a media analyst for Provident National Bank in Philadelphia, said he thought Macmillan’s top priority was to pursue its restructuring.

If the Delaware Supreme Court refused to allow the company to proceed with the current restructuring plan, Thorp said the company might then have to seek outside help to sweeten its restructuring plan or find a friendly buyer.

Bert Boksen, who follows the publishing business for Raymond James & Associates in St. Petersburg, Fla., said the board appeared to have told management to “come up with a reasonable alternative.”

“This forces Macmillan management to respond to legitimate offers,” he said. Boksen said management might well find “the course of least resistance would be to find suitable buyer for the whole company.”

Thorp repeated his estimate that Macmillan might be worth about $85 a share, while Boksen said it could be worth about $90 a share.

In its statement, Macmillan said its board rejected the latest Bass offer at a meeting on Thursday, and would recommend to Macmillan shareholders that they not tender their shares under terms of that offer.

A call was placed to the Bass Group, which is based in Ft. Worth, but its spokesman was said to be unavailable for comment.

Macmillan said its board was notified about Maxwell’s proposal, but “determined to review that proposal in due course in light of the company’s other alternatives.”

The Bass Group, which owns a 9.1% stake in Macmillan, proposed in mid-May to pay $64 a share for the Macmillan stock it did not already own.

Macmillan subsequently proposed a restructuring that would pay shareholders a special dividend and split the company into two separate entities, a publishing company and an information services concern.

The Bass Group challenged the restructuring plan in Delaware Chancery Court, which blocked Macmillan from putting it into effect. Bass also sweetened its bid for Macmillan, first to $73 a share and then to $75 a share and launched a tender offer at the higher price on July 18.

Maxwell’s proposal contained several conditions, including Macmillan’s dropping the restructuring plan. Maxwell Communications Corp., the company Maxwell heads, is the largest printer in Britain, owns the Mirror Group of newspapers there and publishes scientific journals.

Maxwell has said that he wants to make his company one of the world’s largest communications concerns and has spent $1 billion making smaller acquisitions in the United States over the past year. He failed in a bid last year to acquire Harcourt Brace Jovanovich Inc., a Florida-based publishing, insurance and theme park concern.