Phillips Petroleum Co. remained mute yesterday on a bid for control of the oil company by a group led by maverick oilman T. Boone Pickens Jr., while analysts said that alternative offers may be hard to find because of the currently depressed nature of the oil business.
"It's just a different world now, and buying other companies just does not have the allure it once did," said William Randol, an oil-industry analyst at First Boston Corp. Previous attempts to take over oil companies have usually brought out one or more alternate suitors, as was the case last year when Pickens' charge at Gulf Corp. brought competing offers from Chevron Corp. and Atlantic Richfield Co. Chevron finally bought Gulf for $13.2 billion, the largest takeover ever.
Phillips advised shareholders to hold on to their stock until its board has a chance to review Pickens' $60-a-share offer for 15 million Phillips shares. Pickens, whose group already owns 5.7 percent of Phillips' 154 million shares, plans to acquire about 20 percent and then mount some sort of bid to take over the entire company. Pickens said yesterday he had not heard from Phillips' management about his offer.
The stock market yesterday got a chance to react to Pickens' bid, which was made after trading had ended on Tuesday and hasn't become effective yet. Yesterday, Phillips stock soared $5.50 to $53.50, with 7.6 million shares changing hands among speculators, one of the heaviest trading days for a single stock on record.
Analysts say Pickens' effort appears to be well-financed and that Phillips may have to find some other buyer to keep Pickens -- chairman of Mesa Petroleum Co. -- from grabbing control of the Bartlesville, Okla.-based oil company, the nation's ninth-largest.
At Pickens' offering price, it would cost about $9.2 billion to buy out Phillips. Analysts said a higher bid could push the price past $10 billion to as much as $11.5 billion. They also said the number of companies that could put together financing for an offer of that size is small.
Depressed oil prices and other factors are seen as making Phillips look less attractive than other oil companies that have gone on the block in recent years, while the industry's troubles and concerns about assuming a high debt load to acquire Phillips might scare away the major oil companies that would be the most likely suitors. "If you go through the majors, you can eliminate them one by one as candidates," Randol said. "We here at First Boston are hard-pressed to come up with any white knight candidates for Phillips."
A rumor of one possible defense for Phillips swept the stock market yesterday: that the company would acquire its Oklahoma neighbor, Kerr-McGee Co., to make Phillips too large for Pickens to take over. Neither company could comment on the rumors. Kerr-McGee stock went up $2.87 to $30.
The stocks of two other companies Pickens was rumored to be stalking also reacted to his actions as speculators who had been accumulating the stocks in anticipation of a possible offer dumped their holdings. Mobil went down $1 to $27.50 and Unocal fell 12 cents to $38.87. Both stocks traded heavily.