Phillips Petroleum Co. officials, apparently unable to garner enough shareholder votes to pass their controversial plan to recapitalize the company, today extended the deadline for shareholder balloting until Wednesday.
But Phillips Chairman William C. Douce, speaking after a stockholder meeting today at which the company was originally scheduled to announce the results, said he was "optimistic about the outcome of the vote."
Phillips needs about 78 million shareholder votes to pass the proposal, and there have been reports that the company is several million votes shy of that. Several large shareholders have said in recent days that they would vote against the proposal because of dissatisfaction with its terms.
Reportedly, Phillips was particularly shocked by the sudden decision of Capital Guardian Trust Co. of Los Angeles -- which holds about 3 percent, or more than 4 million shares, of Phillips stock -- to switch its vote against management.
While Capital Guardian officials could not be reached for comment tonight, reports were that Robert Kirby, who heads the fund, switched sides because of opposition to the recapitalization plan from his portfolio managers.
A Phillips company spokesman said management would use the extra time to lobby more shareholders to vote for the proposal.
Announcement of the postponement came after an emotional meeting of Phillips stockholders, at which many speakers expressed fears that without the recapitalization plan, Phillips would be taken over and broken up by New York financier Carl C. Icahn -- with the company's home, Bartlesville, becoming a ghost town.
The voting was first extended until Saturday, but Phillips delayed it again tonight because of developments in a court case in Delaware, where Phillips is incorporated.
"This is the flotsam that was thrown upon the shore by the Phillips-Pickens payoff deal," said stockholder Albert I. Edelman, who has filed a civil class-action lawsuit against the company to overturn the arrangement. "It is self serving and rather destructive of stockholder rights and it undermines the economic viability of Phillips."
Edelman's lawyers went before a Delaware state judge seeking an injunction to prevent Phillips from counting ballots on grounds that not all shareholders had been able to cast the votes before the polls were closed. Before the Chancery Court judge could rule on that request, however, Phillips lawyers said the company will simply keep the balloting open until next Wednesday, at which time it will announce the results.
"The people who have come to acquire stock in the company in the last two or three months are not your shareholders, they're not interested in the company," stockholder Harold Stuart said of Icahn and other speculators. "All they want is an extra dollar, an extra quarter. I hate to use this word, but we call them prostitutes."
"We are afraid that ownership will change to people who do not care," Joel Benbow, a local minister, told the 5,000 Phillips shareholders who assembled in a local gymnasium for the meeting. "And without care, there is no community."
Icahn, who owns slightly less than 5 percent of Phillips, did not attend the meeting. But a spokesman for him, Alfred D. Kingsley, told the assembled shareholders, "We also love Bartlesville. . . . We are not against Phillips. What we are against is the recapitalization."
Under the recapitalization plan, Phillips would exchange debt securities for about 38 percent of the company's common stock. Shareholders also would get one share of preferred stock worth $3.32 as a dividend on each common share.
In addition, Phillips would issue the equivalent of about one-third of the remaining stock in the company to a new employe stock-ownership plan. The company also would purchase another $1 billion worth of its stock in the near future. Phillips plans to sell about $2 billion in assets to support the recapitalization plan.
The company has claimed that between the new debt issue and the remaining stock, the recapitalization plan is worth about $53 a share. Wall Street has disagreed, however, and Phillips a few weeks ago sweetened the offer in answer to the criticism. Even so, analysts have valued the offer at between $42 and $50 a share.
Icahn, too, has protested that the recapitalization is worth less than Phillips claims, leading him to mount his pursuit of the company. Icahn has changed his bid several times, but is currently offering $60 a share for about half the company. He would then pay $50 a share for the rest -- $8.5 billion in all. His offer is contingent, however, on defeat of the recapitalization plan. Icahn also is trying to gain control of the company by persuading stockholders to unseat the current board of directors.
The recapitalization plan was created in December as part of a peace agreement that ended a takeover bid for Phillips by a group led by Mesa Petroleum Co. Chairman T. Boone Pickens Jr. Pickens' attempts to take over Gulf Corp. eventually led to the record $13.2 billion buyout of that company last year by Chevron Corp.
In addition to the recapitalization proposal, Phillips guaranteed the Pickens group $53 a share in cash for its 5.8 percent of the company -- a deal that rankled many Phillips shareholders.
Icahn began buying his Phillips shares -- at an average price of around $46 a share -- after the deal with Pickens was struck, as a protest against the recapitalization plan. His tenacity has surprised many Wall Street analysts, who believed Icahn was only seeking to lure in an offer for Phillips from another big oil company and thus make a handsome profit on his holding.
Phillips had worked hard to get the vote out for the recapitalization plan, running full-page ads in newspapers across the country advancing its position and attacking Icahn. In addition, company officials manned phone banks to contact shareholders and urge them to vote, since any abstentions were effectively the same as votes against the recapitalization plan.
Icahn has kept up a publicity blitz of his own, changing his offer several times and attacking Phillips' positions.
But Phillips also has put a takeover price on itself: Its board has said it would accept any offer of $62 a share or better -- $9.6 billion in all. Analysts have said that price is too high.