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Dutch Electronics Giant Ups Bid For American Subsidiary

September 21, 1987

NEW YORK (AP) _ NV Philips sweetened its takeover bid for North American Philips Corp. for a second time Monday, and a lawyer for minority shareholders said the $680 million offer was acceptable.

The Dutch electronics giant said it would offer $56 a share in cash for the 42 percent of North American Philips it does not already own.

NV Philips originally offered $50 a share, or about $610 million, and later sweetened that by adding warrants for stock in its parent company. The new offer does not include those warrants.

North American Philips’ stock rose $1.62 1/2 a share to $55.37 a share Monday in consolidated New York Stock Exchange trading.

The new offer illustrated the ability of dissident shareholders to use the legal system to obtain the highest possible price for their shares in a takeover, even when the acquirer already controls most of the stock.

″It’s an excellent result,″ said Stephen Oestreich, one of the four lead lawyers representing the class of minority shareholders. He predicted that most shareholders would accept it.

NV Philips, based in Eindhoven, the Netherlands, announced last month it wanted to take over all of North American Philips to create ″one unified company″ that could meet the global competition with a single strategy.

North American Philips is known for its Norelco, Magnavox, Philco and Sylvania brand names in lighting, televisions, radios and appliances. It also has a large medical equipment business.

NV Philips said it would offer $55.50 in cash to all shareholders, then pay an additional 50 cents a share upon completion of the merger and approval by the Delaware Court of Chancery of the settlement of litigation.

The extra 50 cents a share would not be paid to any shareholders who chose to keep fighting for a higher price by dropping out of the class of minority shareholders involved in the settlement.

In addition, NV Philips said it would carry out the merger only if at least half of the shares held by minority shareholders were voted in favor.

North American Philips said its board of directors, acting through a committee of independent directors, approved the new bid and will recommend it to shareholders.

Oestreich said the negotiating team was basically the same as ones that obtained higher prices for minority shareholders in takeovers of Standard Oil Co. by British Petroleum Co. and of Shell Oil Co. by Royal Dutch-Shell.

″We got much more than I think people expected,″ he said.

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