Envirodyne Industries Inc. shareholders elected the firm's proposed slate of directors and rejected those nominated by its largest stockholder, Zapata Corp. — thwarting Zapata's attempt to eliminate Envirodyne's poison-pill plan.
Just before the elections, Zapata had offered to acquire the 60 percent of Envirodyne common stock that it does not own already, for $8 per share, or about $69.8 million — half in cash, half in stock. It also said it would assume all $524 million of Envirodyne's debt.
That offer was the climax of a bitter proxy fight that had pitted Zapata against Envirodyne management. Edward Gustafson, Envirodyne chairman, president and chief executive officer, said the fight was wasteful and cost Envirodyne several hundred thousand dollars in legal expenses.
Zapata officials did not return telephone calls.
Prior to the May 16 elections, Zapata had filed a lawsuit against Envirodyne seeking to block Envirodyne from removing Zapata's controlling stockholder, Malcolm Glazer, and his son, Avram Glazer, president and chief executive officer of Zapata, from Envirodyne's board of directors. Envirodyne countersued to stop Zapata from gaining control of Envirodyne.
With control of the board of directors, Zapata wanted to remove the company's stockholder rights plan, which makes a hostile acquisition of a company prohibitively expensive.
Zapata also proposed that three of Envirodyne's five shareholders be Zapata nominees — the Glazers and Robert Leffler Jr., who handles the Glazers' public relations.
Now that Envirodyne has control of the board, company spokesman Roy Wiley said he assumes the lawsuits will be withdrawn.
``The hearings weren't set to go until this fall,'' he said.
``We have said repeatedly that the board of directors is prepared to give careful consideration to Zapata or anyone else who makes a bona fide bid to acquire Envirodyne at a fair price,'' Gustafson said in a news release.
Oak Brook, Ill.-based Envirodyne also said it may change its name.
``We're not an environmental company. The name makes no sense,'' Gustafson said.
The company began in 1970 as a small pollution engineering and research firm. Since then, it acquired Wisconsin Steel Works from International Harvester Co. and several firms in the plastic products field.
Envirodyne's subsidiaries include Sandusky Plastics Inc., Clear Shield National Inc. and Viskase Corp., which make plastic cutlery, barrier films, drinking straws and food packaging.
``We have several names in mind, and we're going through a legal search,'' Gustafson added. ``We should reach a decision in a few months, but it won't be to adopt one of our major subsidiary names.''