Maxwell Boosts Macmillan Bid to $2.51 Billion : Promises to Bow Out if Firm Sells Him 4 Units

In his unrelenting quest to acquire Macmillan Inc., British media magnate Robert Maxwell on Thursday boosted his tender offer for the publishing and information concern to $2.51 billion from $2.4 billion.

Narrowly topping the cash and stock offer that Macmillan accepted earlier in the week from a prominent buyout firm, Maxwell said he will pay shareholders $90.25 in cash for each Macmillan share, up from $86.80 a share.

The Kohlberg Kravis Roberts & Co. offer accepted by Macmillan would pay holders of the company’s 27.8 million shares outstanding $90.05 in cash and securities. Maxwell said members of the financial community valued the Kohlberg bid at less than $89 a share.

In NYSE composite trading, Macmillan rose 25 cents to close at $88.875 a share.

Maxwell also offered alternatively, if he is not successful in acquiring the company, to pay $900 million for four key divisions that Macmillan has agreed to sell to Kohlberg in what is known as a “lockup” agreement.

Under terms of the agreement, Kohlberg would acquire the divisions for $865 million if Macmillan is sold to another bidder.

“As we have said from the beginning, we are desirous of purchasing Macmillan Inc. in its entirety,” Maxwell said in a letter to Macmillan Chairman and Chief Executive Edward P. Evans.

Macmillan Has No Comment

But if Macmillan agrees to sell him the four divisions, “we will promptly . . . terminate our tender offer.”

Those businesses include Macmillan’s direct marketing group; its prized directory division, which publishes Who’s Who and other directories; the Berlitz language schools, and Michie Co., which publishes state legal codes.

Macmillan had no comment on Maxwell’s revised tender offer, which is to expire Oct. 13.

Maxwell, head of Maxwell Communication Corp., had asked Macmillan to conduct a fair auction, but his lawyers have charged that the bidding process has been rigged.

Earlier in the week, Maxwell proposed acquiring the company for $89 a share in a negotiated transaction and said that he asked Macmillan representatives for an opportunity to top any bid the company received.

“They refused to permit this,” he said in the letter to Evans.

Several analysts had expected Kohlberg’s latest bid to end the battle over Macmillan, especially since many had valued the company at no higher than $90 a share.

Attorneys for the Robert M. Bass Group, which controls 9.2% of Macmillan and sparked the bidding war for the company four months ago, also challenged Macmillan’s “lockup” agreement with Kohlberg in court on Wednesday.