British publisher Robert Maxwell, all but counted out in the battle for Macmillan Inc., topped all bids Thursday for that publishing and information services company with an offer of about $2.55 billion.
Maxwell`s move could undo the $2.49 billion leveraged-buyout agreement reached earlier this week between Macmillan and an investor group that includes Kohlberg Kravis Roberts & Co. and Macmillan executives.
Alternatively, it could put more pressure on Macmillan to accept Maxwell`s secondary offer, a $1.4 billion bid for Macmillan`s information services businesses.
Through his Maxwell Communication Corp., Maxwell raised his bid to $86.80 for each of Macmillan`s 29.3 million fully diluted shares outstanding. He previously offered $80 and indicated he might go as high as $84.
Shareholders also would receive the already declared quarterly dividend of 20 cents a share, payable Oct. 14 to holders as of Sept. 30. That would make the bid equivalent to $87 a share, or about $2.55 billion, said Robert S. Pirie, president of Rothschild Inc. and a financial adviser to Maxwell.
The Kohlberg Kravis group is offering $85 a share cash for 94 percent of Macmillan`s shares. But if the offer is oversubscribed, shareholders would get $80 in cash and the remainder in junk bonds and warrants.
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Texas financier Robert Bass has offered $75 a share for Macmillan.
Maxwell`s new bid was announced shortly before the stock market`s close. After a brief trading halt on the New York Stock Exchange, Macmillan closed at $86.50 a share, up $2.12 from the halt and $2 on the day.
A spokesman for New York-based Macmillan declined to comment on Maxwell`s offer.
Last week, Maxwell said he might raise his $80 bid to $84 but would bow out if Macmillan arranged a better offer.
Pirie said Maxwell might have deferred to a bid that offered a higher price and ”immediate benefits to shareholders.” Pirie contended that the Kohlberg Kravis offer, a two-step transaction involving junk bonds and warrants, didn`t meet that test.
Maxwell`s pursuit of Macmillan displays a doggedness not seen in his past efforts to buy a large U.S. publisher. Maxwell retreated when his takeover proposals were countered for Orlando-based Harcourt Brace Jovanovich Inc. and Skokie-based Bell & Howell Co.
Sources close to Maxwell say he is digging in his heels now because so few large U.S. publishers are left for him to acquire.
McGraw-Hill Inc. might be tempting, but it would be more expensive and difficult for Maxwell to acquire. A major obstacle would be McGraw-Hill`s ownership of television stations and the government`s ban on foreign ownership of U.S. broadcast outlets.
Pirie said that Macmillan ”is one of the few companies that logically meets his (Maxwell`s) goals” of creating a global communications and information services company.
Maxwell has alternatively been pursuing Macmillan`s 11 information services businesses. His offer for those lines remains $1.4 billion, having been raised earlier from $1.1 billion.
Under the Kohlberg Kravis buyout, Macmillan would divest some assets to reduce debt. However, Macmillan might hold on to some information services businesses that Maxwell covets.