Two Marathon Oil Co. shareholders have filed a suit against U.S. Steel Corp., three steel company officials and three Marathon officials aimed at barring U.S. Steel from acquiring Marathon shares that were not tendered to the steel company.
In a suit filed in both federal and Ohio state courts, the shareholders claim that shareholders who refused to tender stock to U.S. Steel are being given a raw deal and forced to accept a price for that stock that Marathon's own directors have called inadequate.
"They didn't fulfill their duty with respect to the interests of the nontendering shareholders," said Jacob Stein, an attorney for Irving and Charlotte Radol of Little Neck, N.Y. The Radols own approximately 100 shares of Marathon, Stein said.
The Radols and other shareholders who did not accept U.S. Steel's tender offer will receive U.S. Steel notes in exchange for their shares.Those notes are valued about $75 to $80, Stein said. Marathon directors last November characterized an offer by Mobil Corp. to pay $85 a share for Marathon stock as inadequate.
U.S. Steel defeated Mobil's attempt to acquire Marathon last week. U.S. Steel had offered $125 a share in cash for 51 percent of Marathon's stock and an exchange of notes for stock offered in excess of that amount. The holders of more than 53.8 million of Marathon's approximately 58.7 million shares tendered their stock to U.S. Steel and will receive a combination of cash and notes for their shares.
"You can't put someone to whom you have a fiduciary responsiblity in the positon of selling something they don't want to sell or taking a much lower price," Stein said.
Mobil, Marathon and U.S. Steel all had no comment on the suit.
Marathon shareholders will vote on a plan to merge Marathon with U.S. Steel at a meeting scheduled for March 11.