BRAINERD, MINN. - A legal snag has developed in the deal that would combine Colonel's Inc., a Michigan-based molder of plastic car bumpers, with a small public company that owns Brainerd International Raceway in Minnesota. The deal is a friendly one, but it is being held up by a Minnesota law designed to stop hostile takeovers, said Randy Sparling, lawyer for Brainerd International Inc., the company that owns the car raceway in Brainerd. Sparling said both sides are confident the deal, after some changes, can go through.
``We see the problem as something that can be overcome,'' Sparling said.
In September, Colonel's owner Donald J. Williamson purchased 72 percent of Brainerd International's stock from two executives. On Dec. 15, the two companies signed a letter of intent for Brainerd International to acquire Colonel's, a closely held company headquartered in Milan, Mich.
But Sparling said Minnesota's anti-takeover law says an investor who has acquired more than 10 percent of stock in a public company cannot engage in certain types of transactions with that company for four years. The law was enacted in 1987 in response to a hostile takeover of Dayton Hudson Corp., a Minnesota-based department store company.
Officials of Colonel's and Brainerd International are working on possible alternatives to their agreement, according to Sparling, who is based in Minneapolis.