The three way takeover fight involving F. W. Woolworth Co., and two Canadian firms, Brascan Ltd. and Edper Equities Ltd., slowed a bit today in the face of an Ontario Securities Comission (OSC) ruling and two U.S. court orders. But all of the players are still in the game.
In addition, New York state attorney general Robert Abrams issued an order prohibiting the takeover of Woolworth by Brascan until his investigation under the New York's Securities Takeover Disclosure Act is concluded. A hearing will be held May 10 on the order, Abrams said.
The OSC rejected Edper's application to go ahead with a conditional takeover bid for Brascan. But Brascan's efforts to start its $1.1 billion cash bid for the five and dime chain was stalled by temporary injunctions in South Carolina and Louisiana.
The OSC decision means Edper can't proceed with a $28 a share offer for 45 percent of Brascan, subject to Brascan dropping its bid for Woolworth. Edper says it is continuing pursue "other avenues to have the Woolworth acquisition abandoned."
An Edper spokesman told the Post the other avenues could include a proxy fight for control of Brascan. Edper also fired a broadside of criticism at Brascan management for actions it says "ignore or severely inhibit shareholders' rights."
A South Carolina court issued a temporary injunction to stay the bid for Woolworth by Brascan until a hearing held April 27 by the state securities commissioner.
In New Orleans, a temporary injunction obtained by Woolworth to stop the bid was extended to April 30 when the court will consider written briefs.
Edper, a company controlled two-thirds by Edward and Peter Bronfman and one-third by Patino NV of the Netherlands, holds more than one million Brascan shares. The Bronfmans are members of the family that controls Seagram Corp. Ltd., the world's largest whiskey company.
While the U.S. court rulings are temporary the OSC decision could have stilled Edper's guns permanently.
The Commission decided on Ontario takeover rule would not be varied to permit conditions sought by Edper. In addition to asking that the Woolworth bid be dropped, it wanted to keep its offer open for 120 days, while Ontario rules provide for a 35-day maximum.
OSC chairman James Baillie said by limiting the number of conditions on such bids they are easier for investors to understand.
But he noted, limits are imposed only by four Canadian provinces.
"The possibility that our rules might provoke offerors into making their bid elsewhere than in Ontario adds to my concern," Baillie said.
The decision to reject the Edper conditions was made because the 120 day lock-in period was too long and involved too great a deviation from existing rules, he added.