The Securities and Exchange Commission yesterday filed a complaint in federal court in New York accusing Sun. Co., Salomon Bros and other defendants of violating securities laws in Sun's purchase of 34 percent of Becton Dickinson & Co., the New Jersey health care products manufacturer.
The SEC asked the court to rescind the sale of B&D common stock by Fairliegh S. Dickinson, Jr. and J. H. Fitzgerald Dunning to Sun. Co., a Pennsylvania oil company, and its subsidiary, created for the purchase, LHIW which the SEC said was an acronym of Let's Hope It Works.
The suit alleges that Sun failed to file a schedule 13-D form describing its acquistion earlier this year of about 34 percent of B&D's outstanding common stock.
Last month B&D itself filed suit against Sun, charging that the takeover bid amounted to an illegal tender offer and violated numerous securities laws. Several B&D shareholders have also sued Sun, and the sale is also being crutinized by the New York Stock Exchange and the Senate Banking Committee.
An aide to Sen. Harrison William (D-N.J.) has said that the purchase appears to violate takeover legislation that bears the senator's name, the Williams Act.
The deal began in the middle of January, when Sun spent $300 million to acquire more than one-third of the chased through Salomon Brothers, the shares of B&D. The stock was pur-investment banking firm, from a group of private and institutional accounts.
Among the sellers was Fairleigh S. Dickinson Jr., former chairman of the board of B&D and son of the founder. Dickinson was ousted from the post in a power struggle last year. Dunning is a former company director.
Sun offered the sellers $45 a share for the stock, then trading about $33, and bought the shares without a public announcement.
The various court filings contend that Sun was required to make a public tender offer for the stock.
Other shareholders had no chance to profit from Sun's takeover, because the massive block of stock was purchased before Sun announced its plans.
Also charged were LHIW: Kenneth Lipper, a Salomon partner; F. Eberstadt & Co., a brokerage firm; F. Eberstadt & Co. Managers and Distributors, a broker-dealer and subsidiary of F. Eberstadt & Co. and Robert Zeller, Chairman of the Board of Eberstadt.
Sun released the following statement from its headquarters in Badnor, Pa.:
"Any SEC action alleging our purchases were a tender offer would be an abuse of SEC authority and an attempt to write a new law. We believe this a be highly inappropriate and we intend to defend ourselves against such a charge will all the means at our disposal."
"We state once again that our private purchases of 34 percent of the stock of Becton, Dickinson were made in strict compliance with all applicable law and simply did not violate the tender offer rules."