A U.S. District Court Judge in Ohio yesterday issued an order temporarily blocking Occidental Petroleum Corp. from moving forward in its attempt to gain control of Dayton-based Mead Corp.
The diversified forest products company is bitterly contesting the takeover, which analysts value at about $900 million. The Justice Department is also challenging the merger on antitrust grounds.
In his order, Judge Carl B. Rubin in Dayton prohibited Occidental from soliciting the formal approval of company shareholders to the takeover. The huge Los Angeles energy company was poised to mail proxy and prospectus material to its stockholders and to call a special stockholders meeting for later this month.
Rubin said he issued the order to give himself time to consider the merits of arguments by Mead and the government for a preliminary injuction blocking the merger.
During four weeks of hearings just concluded before Rubin, Justice Department antitrust attorneys have argued that if Occidental were successful in acquiring Mead, the merged company would virtually control the markets for several products, such as sodium chlorate and carbonless paper.
The Justice Department, whose suit has been joined with a like action by Mead, has asked the judge to enjoin Occidental until a formal antitrust suit can be brought to block the merger permanently.