
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, May 29, 1994                   TAG: 9405290023
SECTION: VIRGINIA                    PAGE: C-13   EDITION: METRO 
SOURCE: Associated Press
DATELINE: HARRISONBURG                                LENGTH: Medium

TYSON MAY HAVE TO FIGHT TAKEOVER PRECEDENT

Federal courts have upheld anti-takeover laws in Indiana and Wisconsin that are similar to the ones Tyson Foods Inc. is challenging in Virginia, according to legal experts.

U.S. District Judge James H. Michael has set a July 7 hearing on Tyson's lawsuit that challenges the constitutionality of Virginia's Affiliated Transactions and Control Share Acquisitions statutes.

The lawsuit is part of Springdale, Ark.-based Tyson's attempt to take over WLR Foods Inc. of Broadway. Tyson, the country's No. 1 poultry processor, wants to buy WLR for about $330 million, but WLR leaders are fighting the offer.

Tyson charges that the Virginia laws regulate interstate commerce, saying that the U.S. Constitution gives such power only to Congress. Tyson also says the state's anti-takeover laws are pre-empted by an amendment to the federal Securities Exchange Act called the Williams Act.

The laws give a corporation's shareholders the right to decide whether "raiders" can have certain voting rights, and restrict use of a company's assets to enact takeovers.

Lyman Johnson, a law professor at Washington and Lee University in Lexington, said Friday that challenges to similar anti-takeover laws in two Midwestern states raised both the arguments and were rejected by federal courts.

Johnson said the Virginia Control Share Acquisition Act is very similar to an Indiana law upheld in 1987 by the U.S. Supreme Court, and that the Virginia Affiliated Transactions statute resembles a Wisconsin law the 7th U.S. Circuit Court of Appeals upheld in 1989.

It was a Virginian, retired U.S. Supreme Court Justice Lewis Powell, who wrote the opinion in the 1987 ruling, Johnson noted.

Tyson announced its takeover bid on Jan. 24. WLR stockholders voted May 21 against letting Tyson vote the shares it has obtained.

To win its case, Tyson will have to demonstrate that Virginia laws are different from those upheld in Indiana and Wisconsin, Johnson said.

"Apparently Tyson believes its case is different in some respect. I don't believe those attacks [on the Virginia laws] will prevail. I don't think Virginia's laws impermissibly regulate interstate commerce," he said.

by CNB