Delaware court bars Publicis bid; TN faces more hearings

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Publicis Communications' proxy fight for True North Communications is off again. A Delaware chancery judge this morning imposed a new temporary restraining order on Publicis' tender offer for True North stock in advance of TN's Dec. 30 stockholders meeting, pending a hearing on Monday. Chancellor William B. Chandler III in issuing the order said he was acting mainly to temporarily prevent True North shares from changing hands until he has time to hold the fuller hearing and rule on a request for a preliminary restraining order. He called the dissolution agreement that True North contends stops Publicis from waging a proxy fight "ambiguous."

The judge said he was issuing the temporary order to preserve his options. If Monday's hearing determines that Publicis should have the right to go ahead with the offer, a simple delaying of the stockholders meeting would still give Publicis necessary time to mount a proxy fight, the judge said.Publicis last night reinstated the proxy fight after winning a ruling from the U.S. Court of Appeals for the 7th Circuit quashing a Chicago judge's earlier temporary restraining order.

Judge Chandler's decision to hold a hearing next week means there will be two separate legal actions in advance of the Dec. 30 meeting at which True North stockholders are to vote on the acquisition of Bozell, Jacobs, Kenyon & Eckhardt, a move Publicis opposes. On Friday, a U.S. district court judge in Chicago will hear requests for a temporary restraining order against the Publicis offer on other True North contentions, and on Monday the Delaware court will hear arguments on whether the dissolution agreement prevents Publicis from acting.

Copyright December 1997, Crain Communications Inc.

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