Word: baileys
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Dates: during 1980-1989
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...that a large oil concern could be rationally integrated into a liquor company. They also feared that Seagram would bring in new management. Around the oil firm's headquarters, employees bitterly joked that the motto of a combined Seagram-Conoco enterprise would be "Drink and Drive." Chairman Bailey quickly searched for an alternative merger partner, or so-called white knight, to thwart Seagram's plans. His first choice was Tulsa-based Cities Service, an oil company less than half Conoco's size but with exploration rights to 10 million U.S. acres. Readily agreeing to talk, Cities Service...
...Bailey was bargaining with Cities Service, he and eight other top Conoco officers deftly moved to protect at least themselves in the merger game. Conoco's board of directors gave them new employment agreements that guaranteed the payment of their salaries at least through mid-1984. Bailey's own arrangement called for annual pay of $637,716 until 1989. Observed one cynical Conoco employee: "They equipped themselves with golden parachutes." The company also lined up $3 billion in stand-by bank credit. Conoco executives intended to buy back a large chunk of company stock from the shareholders...
...June 24, the day before the Conoco-Cities Service merger was to be announced, the phone rang in Bailey's office. The caller: Du Font's Jefferson. His question: "Is there any constructive role we can play?" Bailey thanked Jefferson for his concern about the Seagram bid, but replied that he was already negotiating with another company...
Within 24 hours Bailey was on the phone to Jefferson. "Now you can help," said Bailey. The merger talks moved swiftly, in part because Bailey, 57, the burly son of an Indiana coal miner, and Jefferson, 59, a London-born intellectual with a Ph.D. in chemistry, knew each other well. They had worked together on joint gas-exploration ventures that Du Pont and Conoco had begun three years ago in Texas. Jefferson flew to Stamford four times in the next eight days. All along, he assured Bailey that Conoco's management would not be changed...
Suddenly, in the midst of discussions between Du Pont and Conoco, another competitor appeared. Texaco made an offer for Conoco that was roughly comparable to Du Font's bid. But Bailey preferred to stick with Du Pont. He feared that even the Reagan Administration would balk at a merger between the two huge oil companies: a Texaco-Conoco combination would be larger than any U.S. energy firm except Exxon...