T. Boone Pickens Jr. said his investor group would attempt to sell its 13.6 percent stake in Unocal Corp. to the oil company under Unocal's recently made $72-a-share offer for 29 percent of its stock.
But Unocal said it would refuse to buy Pickens' shares -- a position Pickens said he would challenge in court.
The dispute heightened the tension between Unocal and Pickens, the chairman of Mesa Petroleum Co., who has staged hugely successful corporate raids on other oil companies in recent years. Pickens appears to be facing his sternest test yet from Unocal.
Pickens has been trying to garner shareholder approval for a two-month postponement of Unocal's annual meeting, now scheduled for Monday. Pickens sought the delay to give him more time to lay strategy. In the meantime, Unocal has thrown a number of barriers in front of Pickens' attempt to buy 51 percent of its stock. The two sides are locked in a number of court battles over the myriad issues in the takeover fight.
In one arena of court action yesterday, a federal judge in Los Angeles -- where Unocal is based -- gave preliminary victories to both sides. On the one hand he said that he felt that Unocal would probably be able to prove at trial that Pickens' group, Mesa Partners II, had violated federal securities laws in acquiring its initial stake in Unocal stock. But he also ruled that Mesa would probably prevail on its counter-claim that Unocal issued "false and misleading statements" in proxy materials for its annual meeting regarding changes it made in its corporate charter to deter Pickens.
The judge said he had not decided what if any relief was needed in the case, and promised a ruling today on Mesa's request to postpone Unocal's meeting for 30 days and Unocal's request to stop Mesa from getting shareholder votes to postpone the meeting.
Pickens said yesterday that if the judge does not postpone the meeting, he plans to submit Mesa Partners' 23.7 million Unocal shares in response to Unocal's $72-a-share offer to buy 29 percent of its own stock.
Unocal's offer is seen by analysts as an attempt to frustrate Pickens' $54-a-share offer for a controlling interest in Unocal by giving Unocal shareholders a better-priced option and by making Unocal less attractive to Pickens by increasing the company's debt.
But after Pickens said he would attempt to sell his shares to the company, Unocal reiterated its previous statements that it would not accept the Mesa group's stock. Pickens labeled that an "arbitrary assertion" and said he would attempt to have it blocked in court. He said that despite Unocal's contention that it would not accept the shares, the Mesa group felt it had to offer its stock as protection in case the exclusion of Pickens' stock is found illegal.
And Pickens said that even if Unocal does purchase his group's stock, he plans to continue his pursuit of the company.
Pickens said the increasingly complex situation made his proposed adjournment of Unocal's annual meeting even more important to give shareholders time to sort things out. But Unocal Chairman and President Fred L. Hartley said he was confident that shareholders would not vote for postponement.