British conglomerate Grand Metropolitan said Wednesday that holders of nearly 75% of Pillsbury Co. stock had accepted its $5.23-billion offer to purchase the consumer products company.
Although the owners of roughly 63 million Pillsbury shares have agreed to sell under the terms of Grand Met’s offer, the conglomerate has not purchased any shares and significant impediments to its quest remain.
At issue is Pillsbury’s so-called poison pill provisions designed to stop just such a takeover. So far, courts have upheld the poison pill defense, and Grand Met has said its offer is conditioned upon Pillsbury revoking the plan.
On Wednesday, a Delaware judge refused Grand Met’s request to rehear arguments related to Pillsbury’s poison pill. Judge William Duffy had previously upheld the plan, which would make a takeover of Pillsbury prohibitively expensive.
Duffy also agreed to attend a conference with lawyers of both firms in the next few days to discuss some anti-takeover moves announced Monday by Pillsbury, including a plan to spin off its Burger King division. The discussions could lead to the scheduling of a new court hearing. “The poison pill is still there and that issue needs to be resolved” before any shares are acquired, said Walter Montgomery, a spokesman for Grand Met. Meanwhile, Grand Met extended its offer to Nov. 14.
However, analysts say that Grand Met can use the tender offer results to force Pillsbury into negotiations, which the Minneapolis-based foods company has refused so far.
“I think the $60 tender offer still looks very attractive,” said food industry analyst John C. Bierbusse at A. G. Edwards, a St. Louis brokerage firm. “The betting would be on Grand Met at this point.”