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$1.13 Billion Bid for All of Zellerbach : Sir James Goldsmith's Offer May Bring Out New Suitors for Firm

April 02, 1985|VICTOR F. ZONANA | Times Staff Writer

SAN FRANCISCO — Climaxing his four-month cat-and-mouse game with Crown Zellerbach Corp., Anglo-French financier Sir James Goldsmith on Monday offered to acquire all of the outstanding shares of the forest-products company for more than $41.625 a share.

Goldsmith's offer, spelled out in a letter to Zellerbach's management, puts an indicated value of $1.13 billion on the 115-year-old company. The offer could smoke out other bidders for the asset-rich concern, which owns or controls 2 million acres of prime U.S. timberland.

Goldsmith's offer is contingent upon San Francisco-based Zellerbach redeeming the so-called poison pill shareholder rights the company issued last July. If Zellerbach fails to take action to redeem the rights by next Monday, Goldsmith's General Oriental Investment Ltd. said it will mount a proxy fight to gain representation on Zellerbach's board.

The poison pill rights, designed to ward off unwanted takeovers, give Zellerbach holders the right to buy two shares of the surviving company after a hostile takeover for the price of one.

Zellerbach, in a prepared statement, said its directors would respond to the Goldsmith letter "at an appropriate time, which may or may not be on or before the April 8 ultimatum date chosen by Mr. Goldsmith."

Won't Be 'Bullied'

Zellerbach added that its board "will not be hurried, bullied or intimidated by Sir James Goldsmith, whose obvious pressure tactics may have succeeded for him elsewhere but aren't appropriate at Crown Zellerbach."

Goldsmith now holds an 8.6% stake in Zellerbach. His interest in the company first surfaced last December, when he said he planned to buy as much as 25% of the company. Last month, in announcing his initial stake, Goldsmith said he might seek control of the company.

Stock Price Rises

General Oriental said it believes that its bid should be attractive to Zellerbach's directors and shareholders, "particularly in light of the fact that the current market price is so obviously affected by speculation about our intentions."

Zellerbach's common, which has traded for as little as $27.75 in the past 12 months, has been moving up recently on takeover speculation. It closed Monday on the New York Stock Exchange at $41.75 a share, up 12.5 cents from Friday.

Zellerbach has consistently rebuffed Goldsmith's overtures. Last month, William T. Creson, the company's chairman, president and chief executive, told securities analysts here that he would oppose "any external effort . . . to capture our undervalued assets at the expense of greater future opportunities."

The executive, who is generally credited with engineering a turnaround in Zellerbach's fortunes during his three years at the helm, added that "we simply must not allow speculators to exploit values that rightfully belong to all of our shareholders."

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