The violent tug-of-war for control for F.W. Woolworth Co., the giant five-and-dime chain, is over. Brascan Limited of Toronto today announced it is dropping a planned $1.125 billion bid for Woolworth.
A terse statement issued late today by Brascan says it is "abandoning" the planned offer. It has also agreed with Edper Equities Limited to settle "all litigation between them as quickly as possible."
Edper, controlled by Edward and Peter Bronfman, and its partner Patino NY of the Netherlands, holds more than 30 percent of Brascan through Edper Resources Limited and has violently opposed the bid for Woolworth.
The dramatic announcement says a consensus has been reached "as to representation of Edper" on the Brascan board. The statement was issued while the meeting that began at 9:30 a.m. was still underway.
Brascan representatives were unable to say how much representation would be given to Edper or when it would become effective. For Edper to gain immediate representation, some members of the Brascan board would have to resign. The company will hod its annual meeting late in June.
Toronto sources told the Post the Jack Cockwell, president of Edper Resources and Patino, has already been appointed an officer of Brascan.
The Woolworth bid was doomed Friday when Pierre Leval, a judge in the U.S. District Court Judge for the Southern District of New York, lifted restrictions on Edper activities related to Brascan management and the bid for Woolworth.
Brascan issued a statement saying it would study a possible appeal of the decision but there was a change of heart and its directors decided to capitulate today.
Trading in Woolworth stock was halted at the opening on the New York Stock Exchange because of an order imbalance. The Friday decision came after the market closed and the market was closed Monday for the Memorial Day holiday. Woolworth fell $2.13 to finish at $24.63.
The drop in the stock indicated investor anticipation that the bid for Woolworth would not proceed. Brascan planned to pay $35 a share in cash for all of the issued Woolworth common stock. It would have been the largest all-cash takeover in the U.S. market.
Woolworth has been fighting the takeover bid since it was announced early in April. Woolworth Chairman Edward F. Gibbons said in New York that he is pleased the offer is being dropped. "I feel strongly that the original decision of Woolworth's board of directors to oppose the offer as not being in the best interests of Woolworth shareholders has been confirmed by the proceedings to date and by the action of Brascan's own shareholders," he said.
The three-way takeover fight began when Brascan, flush with the proceeds with the sale of its hydroelectric utility in Brazil, announced its brash plan last month.
Edper, which held an iterest in Brascan, said it wanted the offer dropped and was considering a takeover bid for Brascan.
This set off a series of legal actions in U.S. courts, but Edper, in a two-day buying coup, acquired 6.7 million Brascan shares on the American Stock Exchange early this month. Combined with its earlier holdings, Edper has about 31 percent of Brascan, and claims the support of holders of another 15 percent.