A Delaware judge on Friday temporarily blocked Macmillan Inc. from restructuring, a move that heartened investors who want the publishing and information services company sold or revamped at higher terms.
The immediate impact of the ruling is to stop New York-based Macmillan from distributing, as scheduled, special cash dividends to its shareholders on Friday and Saturday.
On the New York Stock Exchange, Macmillan`s stock closed Friday at $75.87, up $2.37 in active trading.
Delaware Chancery Court Vice Chancellor Jack B. Jacobs granted a motion by Texas financier Robert M. Bass for a temporary restraining order preserving the status quo until a hearing can be held on Bass` request for a preliminary injunction. That hearing was scheduled for June 27.
Bass filed suit Monday in Delaware, where Macmillan is incorporated, to block the restructuring.
The suit was filed two days after Bass proposed acquiring the 90.1 percent of Macmillan shares he doesn`t own for $73 a share, or about $1.74 billion. Bass alternatively proposed a restructuring of the company that would give shareholders more cash than would the restructuring fashioned by Macmillan management.
Under the management plan, the company would be split into two concerns, each controlled by Macmillan insiders, and shareholders would receive cash and securities with an estimated value of $64.15 a share.
Macmillan has rejected Bass` proposals. Last week, it filed suit in federal court in New York charging Bass with violating securities laws in connection with his purchases of Macmillan stock.
In issuing the temporary restraining order, Jacobs said shareholders could suffer greater harm if the injunction were denied than Macmillan would if the injunction were granted.
Letting the restructuring proceed, he said, could ”prevent shareholders the opportunity to realize greater values for their shares than afforded by the restructuring.”
He also said that once the restructuring began, ”most of its features could not be undone.” He noted that one of the companies resulting from the revamping would be incorporated in New York and wouldn`t be under his court`s jurisdiction.
Macmillan also faces pressure from the Coniston Partners investment fund, which this week disclosed that it holds a 4.9 percent stake in the company.
Coniston wants Macmillan sold in an auction to the highest bidder.
Bass recently gained control of Bell & Howell Inc., the Skokie publishing and information services company.
Bell & Howell said it is not involved in Bass` bid for Macmillan, but observers believe Bass wants to combine the publishing and information service businesses of the two.
