Poison Pill

No. 3 steelmaker Bethlehem Steel Corp. boosted the potency yesterday of its "poison pill," a shareholder-rights plan that helps guard against hostile takeovers by making it prohibitively expensive for an unwanted suitor to amass a big stake in the company.The change comes a week after WHX Corp., the parent of Wheeling-Pittsburgh Steel Corp., disclosed that it held 1.6 percent of Bethlehem's stock and filed documents with securities regulators signaling its intent to pursue a takeover or merger.

WASHINGTON -- When it comes to campaign finance reform, House Speaker Newt Gingrich and his chief partner in obstructionism, House Majority Leader Dick Armey, must feel like a couple of campers trying to kill a snake that has found its way into their tent. No matter how many blows they deliver, the darn thing keeps on wiggling.The passage by the House of the main vehicle for banning unregulated soft money, sponsored by Reps. Christopher Shays, Connecticut Republican, and Martin Meehan, a Massachusetts Democrat, is the most impressive rebuke yet to the Gingrich-Armey leadership against campaign reform, especially considering that 51 Republicans defected from them on the critical vote earlier this week.

THERE'S NO PURPOSE in reprising the draft charter that Carroll voters decisively voted down in 1992. Even though the population has increased, and the makeup of the county has changed somewhat, there's little chance that the 1992 document would find a sufficient shift in voter attitudes to pass in 1998.But there is growing support for charter government in Carroll, one demonstrated by the demand for a charter referendum by the mayors of all eight municipalities and in the strong petition drive this year that forced the commissioners to appoint a charter-writing committee.

OKLAHOMA CITY -- Fleming Cos. Inc. has been ordered to offer shareholders the right to revoke its anti-takeover defense, a decision that legal experts said could dramatically expand investors' power at the expense of corporate boards.U.S. District Judge Wayne Alley ruled late Tuesday that the food wholesaler and grocery-store owner must include in its proxy a binding resolution that would let shareholders rescind the so-called poison pill. Boards pass such measures to make unwanted takeovers prohibitively expensive.

Norfolk Southern Corp. appealed directly to CSX Corp. and Conrail yesterday to negotiate a plan for balanced rail competition in the East, but failed to back off from its insistence that whoever takes over Conrail pay $115 a share in cash.While the letter from Norfolk Southern Chairman David R. Goode broke no new ground in the three-month battle, it underscored what appears inevitable: that the two sides will either negotiate some middle ground in their fight for Conrail or face the prospect that federal regulators will do it for them.

Martek Biosciences Corp., the Columbia company developing nutritional products from microalgae, adopted a "poison pill" plan yesterday to protect the company from hostile takeovers.Steve Dubin, Martek's chief financial officer, said the company is not a target of a hostile takeover and does not know of any potential takeover bid. The plan was adopted by Martek's board of directors, he said, so shareholders "would understand the long-term value of the company" and to protect them should a takeover attempt ever occur.

Sylvan Learning Systems Inc. said yesterday that it will split its stock in November, and also announced a poison pill plan designed to deter anyone with plans to launch a hostile bid to take over the Columbia firm.Sylvan said it will split its stock effective Nov. 7, with holders of record as of Oct. 7 getting an extra share for every two shares they own on the record date.The poison pill, known formally as a shareholder rights plan, is designed to force any future would-be buyer to negotiate with Sylvan's directors rather than appeal directly to shareholders.

JP Foodservice Inc. of Columbia said yesterday that it has cut off talks with Sara Lee Corp. about taking control of Sara Lee's restaurant supply business in a dispute over the financial terms of the deal, walking away from a chance to become a Fortune 500 company.Three months of talks ended abruptly Monday night when JP Foodservice's board voted at a meeting near the Chicago headquarters of Sara Lee to reject the proposal. Three independent directors and two JP Foodservice executives who sit on the board vetoed the plan, over the objections of three JP Foodservice directors appointed by Sara Lee.The board decided the deal would cut the earnings per share of existing JP Foodservice stock and effectively give control of the company to Sara Lee without making it pay any bonus above JP Foodservice stock's everyday trading value.

Just when it looked as if Maryland would join 46 other states dead-serious about cracking down on drunken driving, state Sen. Walter Baker snatched defeat from the jaws of victory.Mr. Baker had already made known his aversion to so-called per se legislation creating a concrete standard for drunken driving. Anyone caught driving with a blood-alcohol concentration of .10 would be considered drunk. That's the minimum law of the land everywhere but Maryland, Tennessee, South Carolina and Massachusetts.

If Social Security is the third rail of American politics -- touch it and you die -- then Medicare is the poison pill.Congress has a vivid institutional memory of its ill-fated Medicare Catastrophic Coverage Act of 1988. This was legislation passed to please the old folks by expanding coverage. But it also mandated that the beneficiaries should pay the full costs of the new coverage. When senior citizens realized how much of an income surtax would hit them, they raised such a thunderation that Capitol Hill panicked, rescinding the measure 17 months later.

For the first time in more than a decade, Congress has a real chance to lift the crippling restrictions on the federally financed Legal Services Corporation (LSC) that have hampered the agency's efforts to assist poor people seeking redress through the courts. At a time when many people are struggling against the threat of foreclosure, eviction or loss of health and unemployment benefits as a result of the economic downturn, the LSC's services are needed more than ever. Congress should seize this opportunity to make them available as widely as possible.

The offer the Dodgers made to Manny Ramirez was a brilliant public relations move and could turn out to be a very impactful event. Of course, Ramirez isn't going to accept the reported two-year, $50 million offer that apparently includes an option for a third season. The question is how a pre-emptive $25 million-per-year offer affects the other teams that are expected to be involved. It's just possible that the offer was a poison pill that will make some of those teams back out before open bidding even starts.

Two months after an Indiana competitor spent millions acquiring a big chunk of Tessco Technologies Inc., the Hunt Valley company has struck back with a defensive move designed to shield it from a hostile takeover. In documents filed yesterday with the Securities and Exchange Commission, Tessco outlined a stockholder "rights plan" that would allow shareholders as of Feb. 11 to buy a certain amount of stock at half price if anyone tries to obtain 20 percent of the business. The proposal would make it more difficult and expensive to acquire the company, which makes products for operating and using wireless systems.

A week after Baltimore filed a lawsuit alleging predatory lending in black neighborhoods, the Rev. Jesse Jackson met with the city's religious leaders yesterday to urge action to save homeowners from foreclosure. Jackson encouraged the clergy to pressure banks to put a moratorium on foreclosures and to restructure loans so that homeowners can continue to meet payments and hold onto their homes. He said the effects of a massive number of foreclosures would ripple through the economy. "Whole cities are sinking beneath this poison pill ... because government allowed the [lending]

NEW YORK -- ImClone Systems Inc., a biotechnology company best known for the Martha Stewart trading scandal, abandoned its search for a buyer yesterday and offered investor Carl C. Icahn three board seats. Its shares dropped the most in more than nine months. Multiple bidders failed to meet ImClone's price in an auction that began in January, interim Chief Executive Officer Joseph L. Fischer said. In May, ImClone relaxed its "poison pill" provision to give Icahn the opportunity to increase his stake from the current 10 percent and added a director he supported.

THE FEDERAL tax code's most glaring penalty for unsuspecting homeowners - a double-whammy when they're down and out and can least afford it - appears finally to be on the verge of reform. Two influential senators have begun pushing a bipartisan bill that would end the tax code's harsh treatment of homeowners who fall seriously behind on their mortgage payments and face imminent foreclosure. Many homeowners in this situation turn to their lenders to work out some form of accommodation that avoids the crushing costs of foreclosure.

Crown Central Petroleum Corp.'s board of directors instituted a shareholders' rights plan yesterday that would make it more difficult for a raider to take over the company. The "poison pill" plan, which was announced after stock markets closed, comes just months after the head of St. Louis-based Apex Oil Co. proposed a takeover. The Baltimore-based refiner has been losing cash for years, and last February hired Credit Suisse First Boston to evaluate "strategic alternatives" for the company, which could include selling all or part of the business.

No. 3 steelmaker Bethlehem Steel Corp. boosted the potency yesterday of its "poison pill," a shareholder-rights plan that helps guard against hostile takeovers by making it prohibitively expensive for an unwanted suitor to amass a big stake in the company.The change comes a week after WHX Corp., the parent of Wheeling-Pittsburgh Steel Corp., disclosed that it held 1.6 percent of Bethlehem's stock and filed documents with securities regulators signaling its intent to pursue a takeover or merger.

WASHINGTON -- When it comes to campaign finance reform, House Speaker Newt Gingrich and his chief partner in obstructionism, House Majority Leader Dick Armey, must feel like a couple of campers trying to kill a snake that has found its way into their tent. No matter how many blows they deliver, the darn thing keeps on wiggling.The passage by the House of the main vehicle for banning unregulated soft money, sponsored by Reps. Christopher Shays, Connecticut Republican, and Martin Meehan, a Massachusetts Democrat, is the most impressive rebuke yet to the Gingrich-Armey leadership against campaign reform, especially considering that 51 Republicans defected from them on the critical vote earlier this week.

THERE'S NO PURPOSE in reprising the draft charter that Carroll voters decisively voted down in 1992. Even though the population has increased, and the makeup of the county has changed somewhat, there's little chance that the 1992 document would find a sufficient shift in voter attitudes to pass in 1998.But there is growing support for charter government in Carroll, one demonstrated by the demand for a charter referendum by the mayors of all eight municipalities and in the strong petition drive this year that forced the commissioners to appoint a charter-writing committee.