Hostile Takeovers

Illinois Gov. James R. Thompson today signed legislation intended to prevent hostile corporate takeovers. The law authorizes the issuance of "poison pill" shareholder rights or options plans by Illinois corporations without shareholder approval. The plans can make hostile takeovers prohibitively expensive.

Netflix Inc. adopted a stockholder rights plan to thwart hostile takeovers a week after activist investor Carl Icahn announced that he had acquired a 10% stake in the company. Netflix said the move was intended to protect the video subscription service and its shareholders from outside bids for control that the board of directors determined was "not in the best interests" of the company or its investors. The billionaire Wall Street investor, who last week said he had no complaints about Netflix's management, issued a broadside calling the move "an example of poor corporate governance.

House Speaker Jim Wright (D-Tex.) said on Wednesday that he was seeking governmental ways of slowing the pace of leveraged buyouts and hostile corporate takeovers, the New York Times reported. He said the buyouts and takeovers were having an adverse "psychological and economic" effect on the nation, the newspaper reported in its Thursday edition. Wright said he had discussed possible legislation on the matter in a telephone call on Wednesday with Rep. John Dingell (D-Mich.

You don't usually hear the word "chocolate" in conjunction with "dynasty," but that's the focus of "Chocolate Wars" by the British author Deborah Cadbury (yes, of that Cadbury clan). Her fascinating book chronicles the history of chocolate, from its Mayan and Aztec origins to the Victorian-era rise of the chocolate industry and her family's formative role in it. In the 1860s in Birmingham, England, two Quaker brothers, Richard and George Cadbury, owned a small factory that, along with other manufacturers, were trying to figure out how to make use of an intriguing New World commodity called "cacao" or cocoa.

The U.S. economy has benefited from corporations absorbing other companies through hostile takeovers, despite complaints that the mergers cause companies to break up and throw people out of work, the Federal Trade Commission chairman told Congress on Thursday.

Wings Financial of Minnesota is attempting to swoop in and nab El Segundo-based Continental Federal Credit Union in what many believe would be the first hostile takeover in credit-union history. "The way they are going about this is unprecedented in our industry," said Tom Glatt, president of Continental Federal. "The offer was unsolicited, unwelcome and unwarranted."

U.S. investors Carl Icahn and Warren Lichtenstein threatened to start South Korea's biggest hostile takeover after tobacco company KT&G Corp. rejected a bid valued at $10 billion. Icahn and Lichtenstein, New York-based hedge fund managers, said they might make a tender offer after the board of Daejeon-based KT&G spurned their proposal Monday.

Interpore International, which makes synthetic bone-graft material, said Wednesday that its board of directors has adopted a stock plan to discourage hostile takeovers. Under the plan, if any stockholder accumulates more than a 20% stake in the company, the remaining shareholders will have an option to buy $66 worth of common stock for the exercise price of $33. The holder of more than 20% of the company's stock will be excluded from 2-for-1 purchase option.

Delaware legislation aimed at curbing hostile corporate takeovers faces challenges in the courts and possibly in Congress if signed into law as expected. Waiting to attack the law are companies and investors that see it as a hindrance to their takeover strategies and law makers who want the federal government to be the nation's lead takeover regulator.

With his surprise merger offer Monday for Southland-based Kasler Corp., Montana millionaire Dennis R. Washington has ripped a page right out of the 1980s Takeover Textbook. Remember those days? First, you hire a savvy financial marksman to advise you (in this case, David Batchelder, the ex-T. Boone Pickens associate). Then you buy up a substantial number of the target's shares on the open market (8.3% will do).

Peace didn't last long. Activist investor Carl Icahn has launched a new hostile takeover offer for film and television studio Lions Gate Entertainment at $6.50 per share, ending a 10-day détente in which the two sides ceased hostilities to discuss merger and acquisition opportunities for the company. Icahn is already Santa Monica-based Lions Gate's largest stockholder, with 38% of the company, due to shares accumulated in a previous $7-per-share tender, which expired June 30. His new offer positions him to potentially seize control of the company, which has seen its stock price drop to close to $6 since Icahn's bid expired.

Carl Icahn has turned up the heat on Lions Gate Entertainment Corp. The aggressive investor sent a letter Thursday to shareholders of the Santa Monica-based studio informing them that he had increased his offer to $7 a share from the $6 he proposed last month. His new bid values the company at $825 million, up from $707 million. Icahn's move comes in the wake of efforts in the last few weeks by Lions Gate management, led by Chief Executive Jon Feltheimer and Vice Chairman Michael Burns, to rebuff the hostile bid. The executives have frequently claimed that it doesn't value their company adequately.

Lions Gate Entertainment carved out a niche in Hollywood as a maverick that went up against the big studios. Now its own independence is at stake. The Santa Monica motion picture and television company behind the acclaimed drama "Precious" and cable series "Mad Men" is battling a hostile takeover bid by one of Wall Street's most feared speculators -- Carl Icahn. An aggressive financial trader, Icahn is attempting to seize control of Lions Gate and possibly kick out its top managers, whom he accuses of following a flawed strategy and allowing the stock to languish.

One week after Lions Gate Entertainment rejected his holdings in the studio, investor Carl Icahn is launching a hostile takeover bid for the entire company. Icahn is offering $6 a share, which sent Lions Gate shares rising above the offer price in early morning trading. Icahn, who owns nearly 19% of Lions Gate, has been steadily increasing his stake in the studio and recently launched a tender offer to up his stake to nearly 30%. The investor has been angling for more control over Lions Gate, which operates out of Santa Monica under the leadership of chief executive Jon Feltheimer and vice chairman Michael Burns.

General Growth Properties, owner of the Glendale Galleria and other large Southland shopping centers, said Wednesday that it had reached an agreement with a Canadian investor that would enable the mall owner to leave Chapter 11 bankruptcy protection. Brookfield Asset Management Inc., which is part of a company that owns a handful of premier office buildings in Los Angeles County, would invest $2.5 billion in cash in General Growth stock in return for 30% ownership. The deal must be approved by a Bankruptcy Court judge, but if the agreement stands it could rescue Chicago-based General Growth from a hostile takeover attempt by archrival Simon Property Group, the country's largest mall operator.

It's not just chocolate but memories that are made in this genteel company town founded when Victoria reigned. Take the Cadbury Flake, which for many Brits conjures up childhood images of an afternoon at the seaside, with a flaky spear of chocolate stuck into a dripping vanilla cone. Or Cadbury Creme Eggs, so rich and gooey they make your teeth hurt, now as much an Easter tradition in Britain as bonnets, bunnies and ham. Or the Milk Tray assortment, which gray-haired pensioners who remember Cadbury's wartime "Ration Chocolate" buy for their grandkids.

Cimco Inc., a maker of plastic parts for business machines and computers, said Monday that it had adopted a "poison pill" to prevent hostile takeovers. The company declined to say if it is under attack by a hostile suitor. The move puzzled analysts who follow the stock; they said the company is an unlikely target for a takeover. "It's a fine company," said Martin J.

Continental Europe is waking up to the realization that it is going to have to live with the hostile takeover bid, just like the United States and Britain. Some of Europe's oldest and most respected firms suddenly appear vulnerable, analysts say. Their stock is cheap since the 1987 crash, and their appeal has been boosted by prospects of the single, pan-European market that the European Community intends to create by 1992.

The bitter takeover battle between two Southern California technology companies ended Thursday when Broadcom Corp. said it was abandoning its $912-million hostile bid for Emulex Corp. -- at least for now. Broadcom Chief Executive Scott A. McGregor, who only two weeks ago sweetened his offer by 20%, said the Irvine network chip maker will now pursue "other value-creating alternatives."

Another day, another takeover in the works. But this one's different: It's a hostile bid. Broadcom Corp. launched an unsolicited offer Tuesday to buy nearby networking chip maker Emulex Corp. for $764 million in cash, marking the second major technology deal announced in as many days as cash-rich companies see big discounts in the slumping stock market. The bid adds to the signs of life the mergers-and-acquisitions market is showing in harsh economic times.