The Securities and ExchangeCommission charged Allied Stores Corp with failing to promptly
disclose key steps it was taking last September to thwart a
takeover attempt by Campeau Corp.
    In an administrative complaint, the SEC said Allied and its
legal adviser failed to promptly inform shareholders and the
agency that it had begun talks with Youngstown, Ohio, shopping
center developer Edward DeBartolo in response to Campeau's
takeover offer.
    Campeau acquired Allied for an estimated 4.2 billion dlrs
on Jan 1, following a battle with DeBartolo.
    On Sept 25, a day after Allied disclosed that its board had
urged rejection of Campeau's Sept 12 tender offer for 58 dlrs a
share, Allied began negotiating the sale of six shopping
centers to DeBartolo, the SEC said.
    Allied legal advisor and director George Kern, who heads
the merger and acquisitions group at the New York law firm of
Sullivan and Cromwell, decided against amending Allied's SEC
filing to disclose the talks even though they had resulted in
sales price of 405 mln dlrs for the shopping centers, it said.
    Securities law requires takeover target companies to
promptly disclose such things as the sale of major assets.
    The day after Campeau increased its tender offer to 80 pct
of Allied's stock from 55 pct and raised its bid to 66 dlrs a
share from 58 dlrs on Sept 29, Allied and a partnership headed
by DeBartolo began negotiating a takeover deal aimed at
thwarting Campeau, the SEC said.
    Kern again decided against disclosing the talks in an
amended SEC filing, the agency charged.
    Allied's first disclosure of the DeBartolo takeover was
made on Oct 8, even though its board approved the merger on Oct
3 and the merger agreement was executed on Oct 7, the complaint
said.
    DeBartolo and Campeau later engaged in a bitter battle for
control of Allied, with Campeau winning out later in October
when it bought a block of 25.8 mln shares of Allied stock, or
48 pct of the total, in a controversial move made only minutes
after it dropped its hostile tender offer.
    The acquisition of the additional 48 pct, which a federal
judge allowed to be completed, gave Campeau a majority stake in
Allied. Campeau bought the rest at 69 dlrs a share.
    The SEC said it had planned to file a court brief joining
with Allied in charging that Campeau had engaged in an illegal
tender offer.
    But the SEC brief was never filed since the case was
dropped following an agreement between Campeau and DeBartolo.
    In the administrative proceeding against Allied and Kern,
the SEC is asking for an administrative order that they comply
with reporting provisions of securities laws in the future.
    Although Allied is no longer publicly traded since it
became a subsidiary of Campeau, it still files annual and
quarterly reports to the SEC because it has outstanding debt.
 Reuter
