Word: pennzoil
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...company filed for bankruptcy protection after a court said it owed Pennzoil $10.5 billion in damages stemming from an earlier merger agreement. Texaco eventually paid Pennzoil $3 billion, emerged from bankruptcy after 361 days and later became part of Chevron...
Last week, in the midst of those talks, a rumor started that Texaco was offering to buy Pennzoil for $5 billion. If the gossip proved true, the value of each Pennzoil share would instantly have been 105. But instead of creating a gusher of wealth, the rumor turned out to be a dry hole. Pennzoil Chairman J. Hugh Liedtke denied that any merger was imminent, and the stock slumped...
Where the bogus tale originated was unclear. At the New York Stock Exchange, officials tried to pinpoint exactly when Pennzoil's shares started on their unearthly ascent. Said N.Y.S.E. Vice President Richard Torrenzano: "We noticed greater activity both in terms of price and volume by late morning on Tuesday." In Houston, Liedtke first learned of the stock spurt when he received a call in his office atop Pennzoil Place. Said he: "I could only guess that there had been some kind of leak by Texaco about the offer they were going to make." Liedtke later sent a cable...
Little is known about who bought and sold Pennzoil shares, but the majority of the purchases involved blocks of under 5,000 shares, less than the amount normally swapped by pension funds and other institutions. Most of the trading was thus probably not done by big investors. Shareholders who sold before early Wednesday afternoon stood to make huge profits, but those who held on too long watched their earnings evaporate. Said Bruce Lazier, an analyst at Prescott Ball & Turben: "Somebody did a giant con job on a lot of investors...
...companies operating in the Gulf have similar policies. In the course of one nine-month period, Pennzoil searched twelve platforms, 25 boats and 30 helicopters and fired 85 people caught with drugs. The firm now lets go even employees who are found in possession of drug paraphernalia like roach clips and rolling papers...