In what may be the final blow to Mobil Corp.'s effort to acquire Marathon Oil Co., U.S. Supreme Court Chief Justice Warren Burger yesterday denied because of a procedural problem Mobil's emergency plea to block rival U.S. Steel Corp.'s takeover bid.
Burger denied Mobil's emergency application for an injunction without prejudice--which means Mobil may bring the case back to the court if time allows. Unless Mobil pulls off its legal attempt to block the tender offer or another bidder steps forward, U.S. Steel may begin buying Marathon's stock after midnight next Wednesday.
At that point, the takeover war, which has raged for two months, would be over, Mobil conceded in its filing with the Supreme Court.
Burger denied Mobil's request to preserve the status quo on the grounds that Mobil had failed to seek the stay first from the U.S. Court of Appeals in Cincinnati. Mobil had asked the high court on Tuesday to keep U.S. Steel's hands off Marathon until the court could decide whether to review an appeals court ruling against Mobil.
That ruling left standing a U.S. District Court action that barred Mobil's takeover bid on antitrust grounds.
Burger's denial technically leaves Mobil a chance to win a stay from the court of appeals or to take care of the procedural problem and come back to the Supreme Court, but it left the nation's No. 2 oil company less than four working days to do so.
Mobil said it immediately will take its appeal for emergency action back to the U.S. Court of Appeals in Cincinnati. A motion is expected to be filed there this morning.
The company said it had filed its appeal with the Supreme Court in response to closing remarks made by the appeals court in its Dec. 23 decision. At that time the court said the injunction against Mobil would remain in effect until a full trial at the U.S. District Court level "or unless the effectiveness of this order is stayed or overruled by the Supreme Court of the U.S."
Marathon, and U.S. Steel had no immediate comments on the chief justice's action.
"I would guess they may try something, but the chance of prevailing is miniscule," said oil industry analyst Sanfor Margoshes of Bache Halsey Stuart Shields Inc. "If it's not all over, it's getting darned close," he said. Margoshes added that the stock market already is pricing Marathon stock as if the fight had ended: floating in the range of $84 a share.
Earlier yesterday, Supreme Court Justice Sandra Day O'Connor voluntarily excused herself from considering Mobil's emergency application to temporarily block U.S. Steel from completing its $6.3 billion takeover of Marathon Oil. When she withdrew, the application went to Burger.
The request went automatically to O'Connor as the justice who has jurisdiction over appeals from the Sixth Circuit.
As is customary with the Supreme Court, O'Connor gave no reason for her action.
In a related development, Mobil extended until midnight today its $6.5 billion offer to purchase Marathon. The offer was scheduled to expire at midnight yesterday.
The takeover fight began Oct. 30 when Mobil offered to pay $85 a share for 51 percent of Marathon's stock. Mobil sought Marathon because of the smaller company's extensive oil and gas reserves, but another part of Marathon created problems for Mobil's bid.
Because of the combined size of Mobil and Marathon's market shares in gasoline retailing in six midwestern states, Mobil found itself blocked on antitrust grounds.
Mobil sought to defuse the antitrust issue by reaching an agreement under which Amerada Hess Corp. would acquire Marathon's marketing, refining and transportation operations. When Mobil filed its petition with the Supreme Court, it asked the court to consider the bid in the context of the agreement with Amerada Hess. The lower court had failed to do so, Mobil said.
In the meantime, Marathon had reached an agreement with U.S. Steel under which the nation's largest steel producer would pay $125 a share and exchange bonds for Marathon stock for a total purchase price of approximately $6.3 billion.