IN BRIEF : Judge Blocks Plan for Burger King

A judge today temporarily blocked Pillsbury Co.’s plan to spin off Burger King Corp., a key element in Pillsbury’s defense against a hostile takeover by Grand Metropolitan PLC.

Hennepin County District Judge Thomas Carey granted the request of dissident Pillsbury shareholders to prevent the spinoff. But Carey did not rule on the request from shareholders to invalidate Pillsbury’s “poison pill” anti-takeover defense.

Pillsbury stock was up 12 1/2 cents at $62.75 a share in mid-day trading today on the New York Stock Exchange.

Shareholders filed their class action suit to compel Pillsbury to negotiate with Grand Met, a British conglomerate that launched a $60-per-share tender offer on Oct. 4. Grand Met sweetened its bid on Monday to $63 a share, or $5.5 billion, but Pillsbury immediately rejected that offer as inadequate.

In the class action suit, shareholders said the Burger King plan threatened to block Grand Met from acquiring the Minneapolis-based food and restaurant company.

Pillsbury has said the spinoff would create a huge tax liability for Grand Met in the event of a takeover. The record date of the spinoff for Miami-based Burger King was set for Monday.

Carey said the temporary enjoinment of the Burger King spinoff “causes insignificant harm” to Pillsbury and “preserves the status quo.”

The judge said he did not intend to rule on the poison pill issue until Justice William Duffy issues a ruling on an identical request from Grand Met in the Court of Chancery in Wilmington, Del. That ruling had been expected today.