Word: conoco
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...contest for control of Conoco, the energy company laden with 1.7 billion bbl. of oil reserves, 3.8 trillion cu. ft. of natural gas and 14.3 billion tons of coal, whirled on last week at a billion-dollar pace. The opponents: Du Pont, the largest U.S. chemical producer; Seagram, the world's biggest liquor distiller; Mobil, the second largest American petroleum company; and Texaco, the third-ranking oil firm. As the price for Conoco whirled higher and higher, the contestants launched a global financial free-for-all and corralled almost $20 billion in standby credit at multinational banks from...
...weeks ago, Conoco revealed that Du Pont was its choice as a partner. After five days of frantic negotiations capped by a midnight meeting on July 5 between Conoco Chairman Ralph Bailey and Du Pont Chairman Edward Jefferson, the two companies agreed to merge. Jefferson offered $7.3 billion, or an average price of $84.20 per Conoco share. The deal seemed to save Conoco from an unwelcome takeover bid from Canada's Seagram, which had offered $73 per share for about 41% of the oil company's stock. Conoco had also spurned an $85-per-share bid from Texaco...
Instead of ending the affair, however, the Du Pont-Conoco merger announcement merely unleashed a new flurry of financial maneuvering. Within four days, Texaco quietly arranged $5.5 billion in credit from a group of banks led by Chase Manhattan. Pundits speculated that Texaco was gearing up to boost its bid for Conoco or pursue another oil company. Meanwhile Edgar Bronfman, Seagram's tenacious chairman, was mulling his own countermove. He called his board of directors into a special session. The verdict: up the ante. The new offer: $85 per share for 51% of Conoco stock...
Then still another bidder joined the action. Mobil put together a $5 billion credit package, and Chairman Rawleigh Warner Jr. issued a statement leaving little doubt that his company was poised to pounce. Said he: "We know Conoco and the business it operates. Conoco is a great company with fine resources and excellent management and personnel." Surprisingly, Warner's message shrugged off possible Government objections, saying, "Preliminary studies indicate that a Mobil-Conoco merger would not create difficulties under existing antitrust guidelines...
...Conoco disappointment was the second time this year Seagram had been left at the altar with its $3 billion dowry. Its earlier bid for St. Joe Minerals had been quickly topped by Fluor. Will Bronfman pursue yet another U.S. company? Stay tuned. -By Charles Alexander. Reported by David Beckwith/Washington and Frederick Ungeheuer/New York