Macmillan Up $18 a Share on Takeover Talk

NEW YORK — Macmillan Inc. stock soared Wednesday in the wake of an unsolicited $1.5-billion takeover bid led by billionaire Texas investor Robert M. Bass and despite an announcement at the company’s annual shareholders meeting that the publishing concern was not for sale.

Macmillan Chairman Edward P. Evans told an overflowing roomful of shareholders that the company’s board had not had an opportunity to discuss the Bass proposal, and so he could not comment on it. He expressed confidence about the company’s prospects for growth in the future.

Macmillan’s stock was the second most active issue in composite New York Stock Exchange trading, jumping $18.25 a share to close at $68.875, on volume of 2.74 million shares.

“The fact that the stock immediately jumped up is because investors think the stock is worth more in a takeover, and there is every speculation that there will be a takeover,” said Bruce Thorp, media analyst at Provident National Bank in Philadelphia.

Risks of Selling

At Macmillan’s annual meeting in Manhattan, shareholders voted to authorize an increase in preferred stock to 100 million shares from 70 million. The Robert M. Bass Group bid is contingent upon Macmillan’s scrapping plans to issue new preferred shares.

However, some industry analysts did not see Wednesday’s vote as necessarily stymieing Bass.

“While the shareholders agreed to issue the preferred stock, I’m not sure that’s going to be too much of a problem (for Bass),” said Bruce Benteman, a research analyst at Wealth Monitors, an investment newsletter in Kansas City, Mo. “To have the shares authorized is nothing. To have them issued is another matter.”

Thorp also cautioned that issuing the shares would dilute the value of existing common and preferred stock and make the company less attractive to other buyers. “There is risk in selling (the company) now and risk in holding on too long,” Thorp observed.

The Bass group, which already owns 2.4 million Macmillan shares, or about 9.1%, Tuesday offered to acquire the company at $64 a share.