Polaroid Buying Shares to Thwart Raider

CAMBRIDGE, Mass. — Polaroid Corp. began today to buy up $800 million of its own shares in an aggressive attempt to thwart a relentless corporate raider, company officials said.

Polaroid will offer stockholders $50 per share in cash for up to $16 million shares, or 22% of its outstanding common stock, the company said.

The buyback attempt is, in part, an effort to deter Shamrock Holdings Inc. of Burbank, which has been attempting a hostile takeover of the instant photography company since last July, Polaroid said.

The West Coast investment firm is in the midst of launching an expensive proxy battle for control of Polaroid’s board of directors.

Polaroid said its offer is the first step of an approximately $1.125-billion repurchase plan announced by the company Jan. 30. In addition to the 16 million shares, the company also plans to buy back another $325 million of its stock in the open market in privately or otherwise negotiated purchases.

Polaroid said that it expects the repurchase plan to cost $1.151 billion and that funds will be obtained from bank borrowings, proceeds of Polaroid’s placement of preferred stock and warrants to investors Jan. 30 and from cash on hand.

The purchase offer is intended to “provide stockholders who wish to realize a portion of their investment currently in cash with an opportunity to sell a portion of their shares at a premium over recent market prices of the shares,” said Polaroid President I. MacAllister Booth.

Shamrock currently owns close to 5 million Polaroid shares.