Word: marathoning
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Dates: during 1980-1989
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Investors are rushing to buy the stock of potential merger partners in hopes of making a quick market killing. People generally did very well who got into the battle early between U.S. Steel and Mobil for control of Marathon Oil. U.S. Steel last week seemed assured of victory in its takeover bid, estimated to cost $6.15 billion, the second largest corporate coupling in U.S. history. (The largest merger was the $7.5 billion merger of Conoco and Du Pont in 1981.) Workers began to prepare checks for the 17,000 selling Marathon shareholders just hours after Supreme Court Chief Justice Warren...
...which has become generally more promerger since the beginning of the Reagan Administration. The FTC sued Mobil for violation of antitrust laws in order to block the takeover bid. The FTC has left a loophole, though, that would allow Mobil to go ahead if it gives up some of Marathon's gas stations and its distribution network. But the agency still refused to consider Mobil's offer to sell off part of Marathon's holding to Amerada Hess Corp., another oil company, as a way of maintaining competition in markets where both Mobil and Marathon do business...
...Steel, meanwhile, has executed some brilliant takeover strategy maneuvers. It has already acquired the right to buy Marathon's share of the Yates Field for $2.8 billion if the company is bought by Mobil or any other corporation. U.S. Steel also obtained an option from Marathon to buy an additional 10 million shares of its stock, which would make it harder for Mobil to gain controlling interest in the company. Mobil, of course, could try to block both moves in court...
Mobil's fumbling maneuvers apparently have convinced Marathon shareholders that the oil giant will never be able to buy the company, even though it is now offering $1 a share more than U.S. Steel. As a result, more than enough investors are willing to sell their shares to the steel company for the $125 it offered to give it controlling interest. Said a Wall Street banker involved in the negotiations: "Unless Mobil can pull a rabbit out of the hat, it will lose...
...Marathon's executives and their advisers were confident last week that they could defeat Mobil's latest threat. If the oil company starts buying U.S. Steel stock, the price of it is likely to shoot upward, which would make the deal less attractive. And under a federal law that requires prior notice for the purchase of large blocks of stock, Mobil has to wait at least 30 days before it can begin to acquire any more shares of U.S. Steel. But although Mobil's latest shot seems likely to fail, no one is underestimating the oil company...