Mass. OKs Measure to Stall Norton Co. Takeover

With lightning speed, the Norton Co. received a weapon today to help fight a hostile takeover bid from a British firm.

Gov. Michael S. Dukakis signed a bill this morning designed to stall a proxy fight for control over Norton’s board of directors. The bill, which takes effect immediately, was signed in Worcester, the home of Norton.

The measure sped through the Senate and House on voice votes Tuesday, hours after a legislative committee endorsed the bill.

“We must do all we can to protect our best corporate citizens and their workers and families from having their livelihoods wiped out,” Dukakis said in a statement. “This bill gives companies a well-deserved fighting chance against hostile raiders.”

John Nelson, the chairman of Norton, told an enthusiastic crowd of workers that the company “will continue to fight to remain independent.”

Norton faces a proxy fight at its annual shareholders meeting, currently scheduled for April 26. But Norton is asking a federal appeals court to allow the company to delay the showdown until June 26 so executives have more time to plan a defense strategy.

Norton last month rejected a $1.6-billion, $75-a-share offer from BTR. But the British conglomerate says it will try to take control of Norton’s board at the shareholders’ meeting.

The new bill attempts to stall that strategy by requiring Massachusetts companies to elect their boards of directors over staggered terms. A company, however, could opt out of the requirement.

Under the bill, only one-third of the directors would be elected at a time, which means that BTR would have to wait at least a year before it could place a majority of directors on the board.