Judge Blocks Richardson-Vicks Stock Issue
NEW YORK (AP) _ A U.S. District Court judge has issued a preliminary injunction restraining Richardson-Vicks Inc. from issuing a new series of preferred stock declared in response to Unilever N.V.’s tender offer.
District Judge Richard Owen, in a decision delivered late Friday, ordered the drug and consumer products company not to issue the stock at least until a trial could be held. He set no date for a trial.
Richardson-Vicks, incorporated in Delaware and based in Wilton, Conn., had announced its intention to issue the shares in a move to thwart a hostile takeover attempt by Unilever, a Dutch and British consumer products company.
Owen said that issuance of the preferred stock would violate Delaware law, which requires shareholder approval of such action - approval which the Richardson-Vicks had not sought.
The new shares would increase the voting power of those holding Richardson- Vicks common stock as of Sept. 27. Only some of the voting power would be transferrable if the shares changed hands.
The net result would be to guarantee majority voting power to the Richardson family for the next three years, in effect making a hostile takeover impossible.
Vaughn C. Williams, an attorney representing Richardson-Vicks, was quoted in Monday editions of the New York Times as saying that the company disagrees with Owens’ interpretation.
He said that the judge ‴did not refer to the case law we had presented that would allow preferred shares to be issued without shareholder approval.″
Williams, a partner at Skadden, Arps, Slate, Meagher & Flom, said Richardson-Vicks is considering whether to appeal.
In its latest offer Thursday, Unilever said it would pay $60 a share, or a total of $900 million for the company, if the Richardson-Vicks board approves the takeover, and $48 a share if it does not.
Richardson-Vicks had earlier rejected an offer of $56 a share.
In a statement issued here Sunday, Unilever said it was pleased with the decision.