Word: conoco
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...Font's secret weapon was a device called the "double-barreled two-step." The plan allowed Conoco shareholders to choose whether to receive $98 per share in cash or tax-free units of 1.7 Du Pont shares worth about $80. The offer was attractive to many investors because it had no strings attached and provided them two forms of payment...
Mobil, on the other hand, set limits on its offer. Although it raised its bid from $90 to $105, and finally last week to $115 and $120 per share, Mobil's proposal was conditional on its obtaining 51% of Conoco's shares. Mobil also had a severe handicap because it was never able to shake the fear that the Justice Department would block the merger of two oil companies on antitrust grounds...
During the last two weeks of bargaining for Conoco, Seagram was no longer a serious contender. In spite of its nearly $3 billion bankroll, the Canadian distiller could not stay in the bidding with even better-heeled rivals. Seagram's final proposal was $92 per share...
When last week's deadline for investors to sell stock approached, Du Pont had received 47.3 million shares, or 55%, of Conoco stock. Mobil had managed to acquire only 736,000 shares, while Seagram had almost 27 million shares. After its takeover bid had failed, Mobil sold its Conoco stock to Seagram. When Seagram finally converts all its Conoco holdings into Du Pont shares, it will own about 20% of the company and be the second largest shareholder next to the Du Pont family. The stock purchase took Seagram out of bidding for any other oil company...
...battle for Conoco has probably not meant the end of the bidding war for oil companies. Those oil firms remain very attractive takeover candidates because of their rich natural-resources reserves. Moreover, more than half a dozen corporations have some $34 billion in bank credit lines that can be used for a proposed merger. The same day last week that Du Pont claimed victory, all ten of the most active stocks on the American Stock Exchange were oil and gas firms. Some of the possible acquisition targets for the major energy companies: Pennzoil, Mesa Petroleum, Superior Oil, Marathon Oil, Amerada...