Word: seagrams
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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...
...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, largely out of fear that federal trustbusters might block a union of two huge oil firms...
...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...
...Pont's top officers immediately huddled at their Wilmington, Del., headquarters to size up the new Seagram challenge. During a marathon session in the walnut-paneled executive committee room, Chairman Jefferson exhorted his troops: "Du Pont is a strong company, and we're going into this thing...
After Du Pont's new offer, an uneasy and temporary lull settled over the competition. Explained a top financial adviser to Seagram's Bronfman: "We're just going to sit back for a while and see what happens." But then, after three days of waiting, Mobil moved. It offered $7.7 billion, or $90 per share. The other bidders immediately returned to their calculators to plot their next ploys...