University Daily Kansan, March 8, 1984 Page 10
NATION AND WORLD
Socal calls for Gulf Oil shares
By United Press International
PITTSBURGH — Standard Oil Co. of California launched the biggest merger in business history yesterday with newspaper advertisements and letters asking Gulf Oil Corp. stockholders to turn in their shares within a month.
The $1.32 billion deal, intended to save Pittsburgh-based Gulf from Texas oilman T. Bone Pickens, still must win the approval of government antitrust experts and confront rising opposition to oil-industry mergers.
But Social went ahead with the offer, asking stockholders to tender their Gulf shares for $80 apiece by midnight April 3.
Socal, the nation's fifth-largest oil firm, agreed Monday to buy No. 6 Gulf in a deal that would produce the nation's biggest gasoline marketer and third-largest oil company in terms of sales, industry experts said.
THE PLAN SETS the stage for other huge mergers but also could be a test case for future oil industry mergers
and their effect on the nation's energy independence, Wall Street experts said.
"Should oil companies be allowed to spend their cash flow buying each other rather than exploring for oil?" and expert for Paine Webber in New York.
"If Congress gives it the green light, we could be seeing just the first phase." Jacoboski said. "But Congress could kill it and we'd be seeing the final chapter of we'd merger mania."
Chapter 9
The plan came on the beaks of Texaco Inc.'s $10.1 billion offer for Getty Oil Co., the previous record, and followed a number of recent mergers, including Marathon Oil-U.S. Steel, Conoco-Du Pont and Cities Services-Occidental Petroleum.
"That's five large integrated oil companies gone by-bye," Jacoboski said. "And none of these deals has resulted in additional oil and gas."
OPPOSITION TO SUCH deals seems to be building A bill prohibiting mergers among minor oil firms was rejected by Tuesday, and another was expected.
This merger could point the way for other industries, experts said.
If this one were to go through—and it's not clear it will—it would really be a signal to many companies that are in the top five in many industries that could probably meet their needs. Robert Georgetown University Law Center in Washington, D.C., and former Federal Trade Commission member.
Texaco, an object of takeover rumors, bought nearly 10 percent of its stock Tuesday from the Bass family of investors that would make an acquisition difficult.
COMMUNITY Meanwhile, oil companies — especially smaller ones — are vulnerable to takeover bids as the industry finds it cheaper to buy existing oil reserves to than look for new, analysts said.
Experts speculated Pickens and his investment group would buy another oil firm, financed by selling Gulf shares to Socal.
Pickens, chairman of Mesa Petroleum Co., refused to disclose his plans, but said, "All Gulf shareholders win" through the Socal buyout.
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