Bendix Corp. was free to begin buying Martin Marietta Corp. stock today, after a federal appeals court last night overturned a lower court ruling that had put a 10-day hold on the merger battle.
The action allowed Bendix, under the terms of its offer, to begin after midnight last night to purchase Martin Marietta stock pledged to it that had not been withdrawn. Bendix, which is offering $48 a share for Martin Marietta said that 58 percent of the Bethesda aerospace conglomerate stock had been pledged to it by last week.
Martin Marietta, which has made its own $75 a share offer for Bendix, had no comment on the ruling, issued in Baltimore by Chief Judge Harrison L. Winter of the 4th U.S. Circuit Court of Appeals.
The appeals court action overturned a ruling yesterday by U.S. District Court Judge Joseph Young. Young had ordered that Bendix, Martin Marietta and the third player in the battle United Technologies Corp. -- Marietta's ally -- extend their offers for each other by 10 days while courts sort out the several law suits filed by the combatants.
Young, who made the surprise ruling following a meeting with lawyers for the three companies, said "grave and irreparable harm" could be suffered by the companies and investors if the merger battle continued without some consideration of the legal issues involved.
Young ordered that Bendix not buy Martin Marietta stock until Sept. 27, that Martin Marietta not buy Bendix stock until Oct. 2 and that United Technologies not buy Bendix stock until Oct. 8 -- each date 10 days after the companies had originally planned to buy the stock.
Earlier, Young had turned down a bid by Martin Marietta to block Bendix's purchase of the stock on grounds that the Bendix offer violated securites law by not clearly spelling out whether Bendix intended to sell parts of Martin Marietta after a takeover.
Martin Marietta won another court decision yesterday, when a federal judge in New York ruled that Citibank could not withdraw the 4.5 million Bendix shares it had pledged to Martin Marietta. Citibank holds the shares as trustee for Bendix's employe stock ownership plan, and Bendix had demanded that the bank not offer the shares to Martin Marietta.
The Citibank block is a key portion of the 14.5 million Bendix shares that Martin Marietta says have been pledged to it. Martin Marietta, which is offering $75 a share for Bendix, is seeking 11.9 million shares and will exchange stock for the remainder of Bendix's 23.6 million shares.
U.S. District Court Judge David Edelstein ruled in New York that Citibank could not withdraw the Bendix shares it tendered to Marietta without specific instructions to do so from each of the 16,000 Bendix employes who hold the stock under the ownership plan.
In another legal action yesterday, Martin Marietta argued in state court in Delaware that Bendix, which is incorporated there but based in Michigan, should not be allowed to hold a special stockholders meeting Tuesday to vote on proposed antitakeover amendments to its corporate charter. The court said it would rule on the issue Monday.