Mesa Petroleum Co. Chairman T. Boone Pickens Jr., who ended a takeover bid and made peace with Phillips Petroleum Co. two months ago, yesterday opened fire on it again, attacking a controversial "poison pill" adopted by the company to make a takeover more difficult.
Meanwhile, Phillips' board held an all-day meeting yesterday. A spokesman would not say what was discussed.
Pickens, who heads an investor group that is one of Phillips' largest shareholders, said the "poison pill," which Phillips adopted last week to stave off a takeover bid from speculator Carl C. Icahn, was "designed to entrench existing management and shortstop a proposed tender offer to the shareholders of Phillips."
Icahn is trying to take over the company because of his dissatisfaction with its proposed recapitalization plan -- part of Phillips' peace treaty with Pickens.
Phillips shareholders are to vote next week on the recapitalization, which would swap debt for stock and, Phillips hopes, buoy the company's stock price.
Icahn, however, has attacked the recapitalization as worth less than Phillips claims.
Under the "poison pill," Phillips would offer $62 a share in senior debt to shareholders if any investor purchased 30 percent of the company.
In theory, that would create a huge liability for anyone who took over Phillips, but Icahn is trying to cash in on it, offering $57 a share for 25 percent of the company -- enough to give him a total of 30 percent -- and then seeking to trade in his shares for the $62 notes. He has said he would then buy the remaining Phillips shares for $55 each.
Phillips has said, however, that Icahn would not be eligible for the $62-a-share offer.
Pickens, for his part, can't do much more than complain about the disputed provision. Under the peace agreement he reached with Phillips two months ago ending his group's own takeover bid for the company, he must vote the group's shares in favor of the recapitalization -- so he could not protest the "poison pill" with a "no" vote on recapitalization. In return for his support, Phillips has guaranteed to buy back his shares for $53 each.
"We're not bound under our agreement to support poison pills," a spokesman for Pickens said yesterday.
Pickens still could sell his shares to a higher bidder, however, while holding up his end of the agreement with Phillips. Voting for the recapitalization is open to shareholders who held stock as of Feb. 1, so Pickens could sell his shares before the shareholders' meeting and retain the votes.