The Justice Department cleared the way yesterday for G. Heileman Brewing Co. Inc. to do battle with financier Irwin Jacobs for control of Pabst Brewing Co.
Government lawyers filed a proposed consent decree with Heileman that would allow the LaCrosse, Wis.-based brewer to go ahead with its plans to acquire Pabst and then spin off most of the company to avoid antitrust problems. Heileman is the nation's fourth largest brewer, Pabst ranks fifth, and Pabst's partly owned subsidiary, Olympia Brewing Co., ranks eighth.
Under the consent decree, which conforms with Heileman's offer for Pabst, Heilman would keep about 15 percent of Pabst's 19.2-million-barrel annual brewing capacity and the rights to such beer brands as Lone Star and Red, White and Blue. The remaining assets of Pabst and Olympia, including those brand names, would be the basis of a new company, carrying the Pabst name and owned by Olympia shareholders. Pabst shareholders would be absorbed in Heileman's proposed takeover of Pabst.
First, however, Heileman must win control of Pabst in its battle with JMSL Acquiring Corp., a group formed by Jacobs. The government last week said it would not challenge JMSL's plans to acquire Pabst, whose management favors a merger with Heileman.
JMSL seems to hold the edge. Its offer of $30 a share for Pabst is slightly richer than Heileman's bid of $27.50, and the Jacobs group said last week it had received tenders, or pledges, of enough Pabst stock to take control. JMSL may start buying Pabst shares Saturday.
Jacobs, a dissident shareholder of Pabst, has mounted proxy fights and takeover attempts in his bid to unseat the company's current management. One takeover bid was in partnership with Heileman.