Mobil Oil Co., whose $7.7 billion offer for Conoco Inc. was spurned by Conoco's board of directors Monday, today accused Conoco's directors of being "more interested in the well-being of the Conoco top management than the well-being of the Conoco shareholder."
Mobil is one of three companies pursuing the nation's ninth-largest oil company in what has become the most hotly contested and richest merger battle in corporate history.
Seagram Co., the Canadian distiller, has offered $85 a share ($3.77 billion) for 51 percent of Conoco's stock, or 44.35 million shares, while E. I. duPont de Nemours & Co. said it will pay $95 cash for 34.44 million shares ($3.27 billion) and 1.7 DuPont shares for each of the remaining Conoco shares.
Du Pont closed at $45.25 a share today. Its offer has a current value of about $7.3 billion.Du Pont stock has dropped $6 a share since it made its original offer for Conoco two weeks ago.
Du Pont is pursuing Conoco with the approval of that company's board of directors, and Du Pont has agreed to keep Conoco management in place.
Conoco Chairman Ralph E. Bailey, in announcing that the board had rejected the Mobil overture, said that Conoco might sue to block the Mobil bid on the grounds that Mobil, the second-largest oil company in the country, would violate the nation's antitrust laws if it merged with Conoco.
Mobil, in a statement, said that Bailey's threat to sue is "frivolous," wasteful and contrary to the best interests of the Conoco shareholders." Mobil has argued that its review of the Justice Department's antitrust guidelines shows that no antitrust laws would be violated if Mobil and Conoco combined.
Mobil's offer is $90 a share in cash for 43.5 million shares ($3.9 billion). Either its preferred stock or debentures (a type of bond) would be offered for the rest. The preferred stock-debenture package would have a value "substantially equivalent" to $90 a share, Mobil said.
Mobil Chairman Raleigh Warner Jr. said he is "astonished" that Conoco "can find the Du Pont offer, which is currently worth nearly $6 a share, or $500 million -- in the aggregate -- less than Mobil's offer; to be more favorable from a financial point of view."
Analysts say that each of the three offers presents a different type of deal and different types of problems for Conoco shareholders. Seagram will pay $85 a share cash -- $10 less than Du Pont and $5 less than Mobil -- and has said it will buy all shares tnedered up to 43.35 million.
The Mobil offer is conditional upon at least half of Conoco's shares being tendered. So is Du Pont's offer.