Disney-owned Firm Increases Pressure Against Polaroid
Oct. 13, 1988
CAMBRIDGE, Mass. (AP) _ Shamrock Holdings Inc. has increased the pressure in its attempt to acquire Polaroid Corp., charging with full-page newspaper advertisements that the instant camera pioneer is fanning ''fear and concern'' among its employees.
The ads in two Boston newspapers follow a sharp exchange between the presidents of the two companies, in which Polaroid rejected Shamrock's request to meet with stockholders about its $42-a-share buyout offer.
Also Wednesday, a federal court in Delaware held a hearing over Polaroid's lawsuit seeking to block Shamrock from acquiring any additional shares of the company.
Shamrock, a Burbank, Calif.-based television and radio concern owned by the Roy E. Disney family, was rebuffed in an unsolicited takeover bid before making a sweetened hostile offer last month valuing Polaroid at $2.6 billion.
Its latest offensive came in an ad titled ''Why Is Polaroid's President Afraid To Allow Shamrock To Meet With Polaroid Employees?'' in the Boston Globe and the Boston Herald.
The ad appeared one day after Polaroid President I. MacAllister Booth rebuffed a request by his Shamrock counterpart, Stanley P. Gold, to meet with Polaroid employees to discuss the takeover bid.
Booth responded that Polaroid does not ''as a matter of long-standing policy, put outside speakers in touch with our employees.''
Gold countered in the ad directed at Polaroid employees: ''We believe you have the right to hear directly from us as to what we have in mind for employees once our acquisition of Polaroid is completed. Mr. Booth is attempting to create fear and concern among Polaroid's work force.''
Gold told workers they ''have nothing to fear'' if Shamrock acquires Polaroid.
At issue is Polaroid's employee stock ownership plan, or ESOP, which places 14 percent of company stock in employee hands. Shamrock has refused to recognize the ESOP and is suing Polaroid in Delaware's Court of Chancery to block it. Hearings are to begin next week.
But Polaroid's Employees' Committee told its 9,700 U.S. workers they would meet with Gold only if Shamrock drops the lawsuit and acknowledges employees as the largest stockholders.
''The only reason he wants to meet with the employees is to convince us what a great guy he is, so if he loses the suit he can solicit our votes,'' committee chairman Nick Pasquarosa said. ''We'd be willing to meet with him but he has to show some good faith.''
Gold's ad said Shamrock was committed to restoring pay cuts imposed on Polaroid employees to fund ''management's ill-conceived attempt to protect its position by sticking 14 percent of Polaroid's stock in a leveraged ESOP.''
Employees are paying for the shares with a 5 percent pay cut. Polaroid had to borrow $285 million to fund the $300 million ESOP.
Shamrock also criticized Polaroid's ongoing restructuring that includes layoffs and what it called ''exaggerated promises for new products and diversification efforts.''
If it acquires Polaroid, Shamrock has said it would drop Polaroid's fledgling venture into 35mm film, sell most of the company's undeveloped real property, narrow its manufacturing facilities, and limit research and development to Polaroid's core businesses.
Analysts said the court case over the ESOP would be the major determining factor in the takeover battle.
In U.S. District Court in Wilmington, Del., Polaroid asked Judge Caleb Wright to issue a temporary injunction against the ''manipulative, deceptive and materially false'' tender offer. The injunction seeks to stop Shamrock from acquiring additional shares of Polaroid and compel it to divest its current 5 million shares.
Attorneys for Polaroid maintained Shamrock violated securities laws because its offer was not extended to all valid shares, and did not include its investment bankers, Wertheim, Schroder & Co. and Drexel Burnham Lambert Inc., as co-bidders.
Polaroid attorney Paul Saunders said the investment houses would obtain $100 million in stock, or 21 percent control of Polaroid, for $46 million.
But Shamrock lawyer Pamela Jarvis said the investment bankers only brought the deal to Shamrock's attention and the 21 percent stake was part of a fee arrangement.