The proposed acquisition of Houlihan's Restaurant Group by
Zapata Corp. was blocked Tuesday by a DE Chancery Court after the
court ruled the deal violated Zapata's articles of incorporation,
according to Rex Henderson of the TAMPA TRIBUNE. Bucs Owner
Malcolm Glazer controls both companies, and would have received
$29M in cash from Zapata as partial payment for his stock in
Houlihan's. Original terms of the merger had called for approval
by only 50% of Zapata's stockholders, however, the court
determined that the deal requires approval of 80% of Zapata's
voting shares. Henderson notes the decision's impact on Bucs
financing "remains an unanswered question," but that "some
opponents of the deal have charged that Glazer arranged the deal
to pay back loans he took to buy" the team. Henderson cites
documents filed with the SEC that indicate the day before Glazer
closed the Bucs purchase, he borrowed $86M from three banks.
Henderson: "Those loans were originally due March 31 [1996].
Records don't show if the loans were refinanced, but suggest they
were not fully repaid." There was no indication if Glazer plans
to appeal the ruling to the DE Supreme Court (TAMPA TRIBUNE,
9/25).
