Baron attempted a friendly takeover in 1984 and in April made a hostile tender offer for 4.16 million shares of the firm's common stock at $60 a share. The board rejected both offers, and through a variety of defensive moves has stymied Baron's attempts.
During arguments yesterday, attorneys for Strawbridge & Clothier and its officers contended that Baron had included assets owned by his wife and children, as well as the assets of pension funds, individual retirement accounts and charitable trusts, all of which were unavailable to Baron, when he estimated that his net worth was $16 million.
Moreover, Strawbridge attorneys said, Baron's estimate of the value of his ownership in Baron Capital Inc. was overstated by at least one-third because he counted as his own the share of Baron Capital owned by his two children and his brother.
Gregory Harvey, attorney for the Strawbridge family, estimated that Baron's individual net worth was between $6.5 million and $10 million.
The importance of Baron's net worth is that it reflects his ability to raise the $276 million needed to purchase the Strawbridge shares. Moreover, Baron must raise $5 million himself just to begin the takeover.
While most Strawbridge executives consider the takeover bid to be dead
because of Baron's inability to get financing, they continue to take action to avoid an unsolicited takeover.
At the time of Baron's tender offer, family members and company employees who hold more than 40 percent of the Strawbridge stock agreed among themselves not to sell their holdings to anyone for a period of six months.
Baron's tender offer is for two-thirds of the company stock and was extended yesterday to 12:01 a.m. next Wednesday. The family's no-sale agreement prevented Baron from gaining control of the needed two-thirds. Baron said 1.2 million shares had been tendered as of yesterday, which is about 20.2 percent of the company's outstanding shares.