Leucadia Seeks to Block Bergen Brunswig Merger

National Intergroup Inc., the steel and finance firm trying to merge with Los Angeles-based Bergen Brunswig Corp., said Wednesday that a major shareholder has served notice that it will try to enlist other shareholders to oppose the merger.

National Intergroup said the notification by Leucadia National Corp., a New York-based finance and life insurance firm, included a demand for the Pittsburgh firm’s shareholder list. If the merger is successfully blocked, Leucadia said it will then seek four seats on the 14-member National Intergroup board.

Officials of Leucadia, which effectively owns about 6.8% of National’s outstanding shares and first voiced its opposition to the merger in December, could not be reached for comment.

Leucadia was the second major National shareholder to publicly oppose the merger with Bergen, a fast-growing pharmaceutical distributor. T. Rowe Price Associates of Baltimore, manager of mutual funds owning about 8% of National Intergroup’s shares, complained that the merger terms are unfavorable to National Intergroup shareholders.

National, formerly National Steel Corp., and Bergen Brunswig announced their merger plan last October and immediately ran into opposition. A much-delayed prospectus was finally mailed to shareholders this week, and top executives of the two companies plan a news briefing on it today in Pittsburgh.

National also announced that its special shareholder meeting to vote on the merger will be March 7.

Critics complain that the merger would bring National Intergroup stockholders only $28 a share, compared to $35 from an outright sale of the firm and as much as $45 from a liquidation.

National Intergroup Chairman Howard M. Love argues that those numbers are unrealistically high.

National Intergroup sources said Wednesday that the company is making headway in selling the merger to key shareholders--big institutional investors own about 60% of National’s shares--and said it no longer appears that Leucadia would seek control, as it had threatened.

As previously reported, terms of National’s recent sale of 50% of its steel unit to a Japanese firm make an unfriendly takeover of the parent firm less desirable.

Leucadia’s motives remained unclear. But one theory was that Leucadia would hope to use four seats on National’s board as leverage to buy one of National’s subsidiaries, such as First Nationwide Financial Corp., at a favorable price. That San Francisco-based company is parent of First Nationwide Savings.