Polaroid Sues to Block Shamrock Takeover Bid
Polaroid Corp., fighting a hostile takeover bid by Roy E. Disney’s Shamrock Holdings, sued Wednesday to stop Shamrock from buying its shares and accused the Burbank investment firm of a wide range of securities law violations.
The lawsuit, filed in U.S. District Court in Wilmington, Del., called Shamrock’s $2.4-billion offer “illusory,” accusing the firm of “obfuscation, deception and manipulation” in making its bid. It also accused Shamrock of hiding the names of its partners, alleging that it failed to list in Securities and Exchange Commission documents that its investment bankers--Wertheim Schroder & Co. and Drexel Burnham Lambert Inc.--are co-bidders in the offer.
In addition, Polaroid in the lawsuit drew a link between the launching of Shamrock’s tender offer Sept. 9 and insider trading charges made in a civil suit filed two days earlier by the SEC against Drexel and its “junk bond” chief, Michael Milken. Polaroid accused Shamrock of rushing to make its bid because Drexel was eager to prove to Wall Street that “it was capable of orchestrating a transaction of this size and that business was going on as usual.”
Polaroid further alleged that Shamrock had glossed over Drexel’s legal problems in its purchase offer documents, failing to disclose that the SEC suit is the largest of its kind ever filed, that key Drexel employees are the target of a grand jury investigation and that the outcome of Drexel legal proceedings could affect the firm’s financing of Shamrock’s offer.
Shamrock is offering $42-a-share for the shares in the Cambridge, Mass., instant photography company that it doesn’t already own. Roy E. Disney, who was named in the suit along with his wife, Patricia, is the nephew of the late Walt Disney. Also named in the lawsuit was Shamrock President Stanley P. Gold, who runs Shamrock, and five Shamrock-related partnerships and corporations.
A Shamrock spokesman declined to comment on the lawsuit, but sources close to the firm have previously denied any link between Shamrock’s tender offer and the SEC charges against Drexel. A Drexel spokesman said the firm has not seen the Polaroid lawsuit and declined comment. Representatives of Wertheim Schroder could not be reached for comment.
Polaroid’s lawsuit came one day after its directors recommended shareholders reject Shamrock’s offer and disclosed that they are considering selling a minority stake in the company, a move that would effectively kill Shamrock’s bid unless it was successfully challenged.
