Mesa Petroleum Co. Chairman T. Boone Pickens Jr. said today he apparently has lost a crucial shareholder vote in his effort to take control of Unocal Corp.
But Pickens said after today's annual shareholder meeting that he will challenge the voting because of what he said were questionable promises made to shareholders by members of the company's management.
Unocal officials, who denied the charges, said they will announce the results of the shareholder balloting next Monday -- an indication that the vote was close.
Pickens had asked Unocal shareholders to vote to adjourn today's meeting until the end of June to give his investor group a chance to formulate and present to shareholders a comprehensive plan to take over the company.
Pickens' investor group, which owns about 13.6 percent of Unocal, went to court immediately after the meeting in an effort to get the results of the shareholder balloting thrown out and the election rerun.
In an interview after the meeting, Pickens said "we probably do not have the vote." And Unocal Chairman and President Fred L. Hartley said at a press conference, "We're optimistic" about the outcome of the balloting.
Should Pickens indeed lose the vote and be unable to convince a court to overturn the results of the balloting, it could be a year before he is able to mount a serious challenge to Unocal because the corporate bylaws make takeover challenges difficult between annual meetings. It would take a shareholder vote at an annual meeting to change the bylaws.
Today's shareholder meeting provided a good deal of give and take among Pickens, Hartley and Unocal shareholders about the relative merits of Pickens' proposals and the alternatives presented by Unocal, which include a $72-a-share buyback of 29 percent of the company's stock.
Even as the meeting was going on, Unocal lost a key court challenge pertaining to that offer: The Delaware Court of Chancery, upholding an earlier decision, ruled that Unocal would have to include the shares held by Pickens' group in any stock buyback. Unocal said it will appeal the decision.
Hartley said Unocal reserved the right to withdraw the $72-a-share offer rather than buy Pickens' shares under it. The prospect of Unocal dropping the offer rather than buying Pickens' stock appeared to disturb many shareholders who spoke at the meeting. Some indicated frustration at Hartley's unwillingness to promise that the buyback will take place regardless of Pickens' participation.
The question of Unocal's position on buying back Pickens' stock is also at the center of Pickens' challenge of the shareholder vote. Pickens said some large Unocal shareholders were promised by Unocal officials that the company would follow through with the $72-a-share offer even if the Pickens group were included.
David Batchelder, vice president for finance at Mesa, said the Pickens group would file affidavits with a federal court here from stockholders who were given this promise, but he would not give more details.
Hartley denied that such a promise had been made to any of his company's shareholders.
One of the meeting's lighter moments came when Hartley said that all the publicity over the battle with Pickens had allowed Unocal to cancel a "several-million-dollar" institutional ad campaign to tout the recent change in the company's name from Union Oil Co. of California. "Thanks to Mr. Pickens," he said, "everybody knows us."