Suit Claims Violation Of Arms-Length Dealings In Bid For Harland Clarke

Register now

NEW YORK – A shareholder in M&F Worldwide, the parent of Harland Clarke check printers, filed suit yesterday against billionaire financier Ron Perelman and his MacAndrews and Forbes Holdings.

“Perelman is opportunistically seeking to take the company private at an inadequate price when the company’s stock price is trading at a two-year low,” said the suit, filed in Delaware Chancery Court.

MacAndrews and Forbes, which is wholly owned by Perelman, owns 43% of M&F and bid Monday to acquire the remaining shares at $24 each, a 41% premium to last Friday’s closing price, but a 22% discount to its 52-week high of $30.77.

M&F is the parent of Harland Clarke, which it formed by the 2005 acquisition of check printer Clarke American and the 2007 deal for John H. Harland Co., as well as Harland Financial and Scantron. Barry Schwartz, the chief administrative officer for MacAndrews and Forbes, also is CEO of M&F.

Perelman’s control of M&F Worldwide also makes it “unlikely that any special committee would render an independent decision that protects the interest of the public shareholders,” the lawsuit said.

In Perelman’s offer, he stated that he would not be selling the shares of M&F Worldwide he already owns. The lawsuit said that refusal means the company will be unable to perform a market check on the company’s value by entertaining other bids.

Shareholders leveled similar accusations against Perelman after his deal for common stock of Revlon Inc, which he also owns. The cosmetics company reported strong results after some common shares had been swapped into preferred stock.

 

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER