3 Holders Lose Bid to Postpone Time Meeting

Time Inc. won a minor skirmish in its battle against the takeover bid of Paramount Communications Wednesday when a Delaware judge rejected three big shareholders’ motions for postponement of Time’s annual meeting scheduled for Friday.

Meanwhile, shares of Paramount surged again on heavy volume amid renewed rumors that the hostile bidder may find itself the target of a takeover attempt. Time has made a $70-a-share offer for Warner Communications as a defense against Paramount’s bid.

The shareholders--Texas billionaire Robert M. Bass, Hollywood producer A. Jerrold Perenchio, and cable operator Cablevision Systems Inc.--contended that Time hadn’t properly informed shareholders about the events that have transpired since proxy materials were mailed May 22. Paramount made a $175-a-share bid for the company June 7, then increased it to $200 a share last Friday.

The three shareholders contended that information on the bids--and Time’s rejection of them--could affect voting on the four incumbent directors who are up for reelection at Friday’s meeting.

‘Deserve More Scrutiny’

But Chancellor William T. Allen of Delaware Chancery Court, ruling from the bench, said a delay was unnecessary because nothing that could happen at the meeting could irreparably harm shareholders’ interest. Even if the incumbents were voted out, he said, they would continue to serve temporarily until the next directors’ meeting was convened.

Allen said there may be merit to other complaints of the shareholders. The complaints “deserve more scrutiny than the court is able to give them in this setting,” said Allen, noting that he is preoccupied with preparation for the July 11 hearing on the dispute between Paramount and Time.

Paramount’s shares jumped $3.375 to $62.875, with about 2.7 million shares trading hands. The volume, much of it in the last hours of trading, made Paramount the most active stock on the New York Stock Exchange. Time shares fell $6, closing at $157.25 on volume of about 1.3 million shares.

Traders speculated that the movement might be because of new rumors that oilman Marvin Davis, broadcast mogul John Kluge or others were accumulating shares of Paramount in preparation for making a bid of their own. The talk was stimulated by a television report Thursday night in which financial columnist Dan Dorfman said outsiders were accumulating Paramount shares. Dorfman last week correctly predicted that Paramount would increase its offer for Time to $200 a share, traders said.

Lawrence Garshofsky, a vice president at the Los Angeles arbitrage and money-management firm of Kayne, Anderson & Co., said the pattern of movements in Paramount’s stock was in some ways consistent with the idea that an outsider was stockpiling large blocks of shares. He noted that Paramount’s stock has closed higher on days it might have been expected to decline, such as the two days on which the company announced its offers.

At the same time, he added, the pattern “may be meaningless. . . . There may be nobody out there.”

In Manhattan, U.S. District Judge Robert Sweet said he delayed a decision on Time’s complaint that Paramount’s tender offer has misled shareholders into believing that the company’s offer expires July 7.

At the hearing, Time attorney John E. Beerbower argued that shareholders would feel pressured to tender their shares to Paramount by July 7, although Paramount officials have indicated elsewhere that the company has no intention of ending the offer at least until the July 11 court hearing in Delaware.

Barry Ostrager, attorney for Paramount, contended that Paramount has informed shareholders in other documents that it will probably extend the offer. But he said use of the July 7 expiration date was not misleading, because under some circumstances Paramount might want to close the offer then.