Takeover Bid

Norfolk Southern Corp. lost two battles yesterday in its efforts to kill a provision in the CSX-Conrail merger agreement that prevents Conrail from discussing a merger with anyone other than CSX for two years.A federal judge in Philadelphia refused to strike down the so-called lockout provision in the merger agreement. Hours earlier, the Surface Transportation Board in Washington also refused to declare the measure illegal, saying it had no jurisdiction to make such a ruling.The decisions represent more setbacks for Norfolk Southern in its $10.3 billion hostile takeover bid for Conrail.

American Telephone and Telegraph Co. lost the first legal skirmish yesterday in its hostile takeover bid for NCR Corp., but experts on Maryland's anti-takeover laws say more battles may be forming over the issue in the courts.Judge Frederic N. Smalkin dismissed yesterday a lawsuit brought by AT&T against NCR last week in U.S. District Court here. The suit challenged NCR's attempt to use Maryland takeover laws to prevent the acquisition, but Judge Smalkin said his court lacked jurisdiction.

Mittal Steel Co. NV said yesterday that it has succeeded in its $32 billion takeover bid for Luxembourg-based Arcelor SA, having acquired half of Arcelor's shares. While the final tally won't be announced until next Wednesday, Mittal officials said they are confident that enough Arcelor shareholders have agreed to sell their shares to Mittal, which is based in Rotterdam, the Netherlands. The merger would create the world's largest steelmaker, to be called Arcelor-Mittal, with annual production of more than 110 million tons.

Mack Trucks Inc.'s investors and workers will have to wait until Monday to find out who won the game of financial "chicken" that decided the 100-year-old truck-maker's fate.Spokesmen for Renault Vehicules Industriels in New York said yesterday that it would take several days to find out whether their company had received enough stock to take over troubled, Allentown, Pa.-based Mack by the 9 p.m. Friday deadline.The French automotive giant had said that if it did not have control of 90 percent of Mack's stock by last night, its takeover bid would fail and that the maker of bulldog-emblazoned trucks might be forced into bankruptcy.

WASHINGTON -- The Supreme Court ruled yesterday that the government has broad power to prosecute individuals who trade stock based on inside information about a company to which they have no direct ties.The 6-3 ruling upheld a theory that the Securities and Exchange Commission has used for years to target investors who do not work for a company but who obtain private information about the company and use it to trade the stock. The theory is called the "misappropriation theory."In a separate part of the decision, the court by a 7-2 vote upheld an SEC rule that bans buying or selling of stock in a company that is a target of a takeover bid, if the trading is based on "nonpublic information" about the bid.Lawyer convictedThe theory and the rule were challenged unsuccessfully by a Minnesota lawyer who made more than $4.3 million by trading the stock of Pillsbury Co. based on information from his law firm when Pillsbury was a takeover target.

Cosmetic Center Inc., the Savage-based makeup and hair-care superstore chain, received and instantly rejected yesterday a surprise offer of $54.6 million from Miami-based Perfumania Inc.The offer touched off a day-long flurry of executive meetings at Cosmetic Center's headquarters and caught the analysts who cover the 71-store chain totally off guard."

Fairchild Corp. in Chantilly, Va., announced yesterday it has received an unsolicited takeover offer from Mountleigh Group PLC to purchase all of the company's Class A and B common share for $10.25 a share in cash and $4 a share in preferred stock either issued or guaranteed by the London-based company.Fairchild, a leading supplier of aerospace and industrial products, said terms of the preferred stock acquisition were not provided.The proposal is subject to a mutually acceptable merger agreement, and the proposed terms might be improved slightly, Fairchild said.

In their first face-to-face conversation since IBM began its hostile takeover bid for Lotus Development Corp., the heads of the two companies met yesterday in New York City, according to an executive familiar with the meeting.While the meeting was described as merely exploratory on the part of Lotus' chairman and chief executive, Jim P. Manzi, it is expected to continue today and is the first indication that Lotus is at least willing to hear IBM's case for acquiring the software company through a $60-a-share tender offer.

WILMINGTON, Del. - Former PeopleSoft Chief Executive Officer Craig Conway testified yesterday that he may have overreacted to Oracle Corp.'s $7.7 billion hostile bid by attacking its founder, Larry Ellison. Conway, who described Ellison as "sociopathic" after the June 2003 bid, told a Delaware Chancery Court judge that he decided to vilify Oracle and Ellison as part of an effort to fend off the offer, now valued at $21 a share. Oracle is suing People- Soft, seeking to knock out the company's takeover defenses.

Glen Burnie Bancorp executives and directors have dropped a lawsuit against a former director and Edwin F. Hale Sr., chairman of First Mariner Bancorp, that accused them of illegally soliciting proxies and votes from stockholders.The lawsuit was filed last month, two days before Glen Burnie Bancorp's annual meeting, at which Susan Demyan, the former director, and stockholders backed by Hale unsuccessfully tried to oust management."Since we won, that claim is moot," Price O. Gielen, an attorney representing the $225 million-asset banking company, said yesterday.