Judge Bars AMF Protection Plan
NEW YORK (AP) _ A federal judge signed an order Friday blocking AMF Inc. from boosting the value of its stock to thwart a takeover attempt by Minstar Inc. AMF promptly appealed, while Minstar considered its options.
Minstar, which had called AMF’s plan ″a deadly and illegal poison pill,″ was ″still evaluating the situation″ after winning the preliminary injunction against AMF, said Minstar spokesman Jim Farrell.
″The situation is still in flux″ and was likely to remain that way at least until Monday, when Minstar was expected to announce its next move, said Rocky Portanova of AMF.
He said AMF on Friday asked the 2nd U.S. Circuit Court of Appeals to review the injunction by U.S. District Judge Mary Johnson Lowe, who issued the order Thursday evening but signed it Friday.
Minstar, which already owns 7.5 percent of AMF, offered $23 per share for an additional 43 percent - enough to give it control of AMF for $276 million.
AMF sought to block the takeover by buying back all its outstanding common stock for $23 a share in preference stock and debentures, or bonds. The plan would have made AMF more expensive - and thus harder to take over - because preference stock is more valuable than common stock, Portanova said.
He said the AMF plan would have been triggered when someone else acquired 30 percent of the company’s common stock. But the judge issued a 29-page ruling barring the plan on the ground that there was a strong argument AMF intended ″only to entrench itself.″
Portanova said he expected a hearing on AMF’s appeal next week.
AMF, based in White Plains, makes sports products - such as golf clubs and bowling equipment - and ″industrial technology″ products such as electrical relays and timers. It had sales of $1.1 billion last year, and profits of $14.9 million, Portanova said.
Minstar, based in Minneapolis, makes boats and runs a moving and storage business. Its 1984 sales were $598 million, and profits were $23 million.