Wellman v. Dickinso

475 F.Supp. 783 (1979)

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Nature of the Case

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Facts

Dickinson was removed as chairman of the board of Becton, Dickinson & Company. He decided to get even and engaged two brokerage houses, Salomon and Eberstadt to sell his shares to someone interested in taking over Becton. Dickinson controlled about 16% with his shares and those of his daughter. Sun decided to move quickly on the offer. Possible strategies were discussed for taking over Becton. Sun was advised that the law regarding tender offers was still murky and that the concept of the tender offer had yet to be fully defined. The lawyers wanted to negotiate a private transaction. Numbers of between 40-60 solicitee’s were thought proper. The team devoted to this strategy figured that they needed to get 331/3% of the shares of Becton. Offers were made to private individuals. Representatives of Salomon and Eberstadt visited Dickinson and made the Sun offer to him. Dickinson wanted $45 per share to be paid in installments over a period of time. The same offers were made to his daughter and a number of other private individuals and trusts. They all went for the $45 offer. There was a meeting at Salomon for those who were to solicit the institutions. Some 30 institutions were contacted. All the callers at Salomon read the scripts they were given that did not identify the buyer. The details of the script were given on the bottom of page 1045 Choper 5th. Before the close of business on January 16th, verbal commitments for 20% of the shares were received. Those involved were called back and the shares were accepted at $45 per share. Couriers were dispatched on January 17-18 to pay for the stock and complete the transactions. The issue was whether this violated the Williams Act.