Takeover

NEW YORK -- IBM formally began its hostile tender offer for Lotus Development Corp. yesterday and moved to replace Lotus' board of directors with three new directors of its own choosing.Meanwhile, shares of Lotus Development inched higher as the company's chairman, Jim Manzi, huddled with Wall Street advisers to consider alternatives to IBM's surprise bid to take the company over for $60 a share.Wall Street traders, sensing a takeover at a price above the initial offer, pushed Lotus shares further above IBM's bid. The stock gained 37.5 cents yesterday, closing at $61.81.

As the State Board of Education voted to seize control of 11 Baltimore middle and high schools, city leaders erupted with anger yesterday and promised a fight to block the takeover through court or legislative action. Around a city often divided by squabbles over how to fix broken schools, parents, students, ministers and elected officials gathered to speak in unified protest against what they see as an unwarranted and politically motivated action in an election year. Online For developments in the state's proposed takeover of 11 city schools, and archived coverage of the city school crisis, go to baltimoresun.

ANNAPOLIS -- Dozens of Baltimore City Jail guards packed a meeting of the city's senators yesterday and demanded that they fight any state takeover of the jail, a demand that surprised the senators.The guards said they feared a state takeover would threaten their rights as city employees. Topping their list of concerns were a possible loss of collective bargaining and seniority and salary differences between city and state employees."If you are concerned about the future of Baltimore, then be concerned about the 791 employees of the jail who stand to lose," Loristine Coleman, a 17-year jail employee, told the senators.

AMSTERDAM, Netherlands - Rodamco North America NV executives mismanaged events leading up to a $5.3 billion takeover offer for the fourth-largest U.S. shopping mall owner, a Dutch court said yesterday. It reversed changes made in the contracts of the company's management board in September that would have guaranteed members higher payouts if Rodamco NA was bought. Management board members can seek to renegotiate the agreements, the court said. The Amsterdam court was deciding on a complaint from VEB, a Dutch shareholder association, that Rodamco NA's executives mismanaged the real estate investment company, including issuing new shares to a voting trust and granting the higher takeover-related payments.

A joint state-city transition team, composed of aides to Mayor Kurt L. Schmoke and Gov. William Donald Schaefer, will oversee the state's proposed takeover of the Baltimore City Jail."

The city is taking over the debt-plagued Harrison's Pier 5 hotel and restaurant at the Inner Harbor -- at a cost to taxpayers of $5.25 million.Under an agreement approved yesterday by Baltimore's Board of Estimates, the city will give up to the Federal Deposit Insurance Corp. $6 million of a $6.6 million municipal loan guarantee for the project in return for title to the property. At the same time, the city will receive $750,000 from the owners of the property.The $5.25 million cost of the takeover is in addition to a loss of $5 million in federal loans funneled through the city that were never repaid and a loss of $1.2 million in unpaid property taxes.

With all the trappings of a political campaign, the 44,000-member state teachers union launched a scathing attack yesterday on a proposal to let the state take control of faltering schools and put some of the worst of them in private hands.Accusing the State Board of Education of trying to "seize" schools and "sell them to the highest bidder," Karl K. Pence, president of the Maryland State Teachers Association, promised a fierce battle whose theme he summed up in four words: "Hands off our schools."

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.

TOKYO -- Japanese leaders agreed yesterday on a plan designed to restore the nation's debt-burdened banks to health, a crucial step to reviving growth in the world's second largest economy.The plan calls for a government takeover of some of the country's biggest and weakest banks, closing smaller institutions and pumping trillions of yen in taxpayer money into the banking system to dispose of bad loans.The prolonged debate over what to do about Japanese banks took on new urgency in recent months as it became clear that Japan's slumping economy -- now in its third quarter of contraction -- threatened growth around the world.

WHO WOULD you root for? Omnicare - enormous, voracious and alien? Or NeighborCare - friendly, new, right on your block and happy to lend a cup of Metamucil in an emergency? I know who I want. But I'm not sure I would bet on them. NeighborCare Inc. is a moderately large Baltimore corporate headquarters company, employing about 450 downtown workers and dispensing more than $1 billion in drugs each year, mostly to nursing homes. It's a promising growth story and a plum for the local economy.