DALLAS, SEPT. 11 -- One year after spending $1.21 billion to expand internationally, Oryx Energy Co. said today it would buy out its founding Pew family in a cash and stock deal worth about $1.4 billion.
Oryx said it will pay $53.75 per share, or $967.5 million, for 18 million shares of common stock owned by The Glenmede Trust Co., which represents the interests of the wealthy Philadelphia family.
The company also will swap 7.3 million shares of preferred stock Glenmede holds for the same number of common shares. The trust said it will sell the stock in a public offering "as soon as it is practical." At the buyout price, the offering could bring the trust another $392.4 million.
As part of the deal, John G. Pew Jr. and Albert E. Piscopo, senior vice president of the trust, have resigned as Oryx directors, company spokesman David Clarke said. The trust's holdings represent 27 percent of Oryx.
Oryx shares were down 25 cents to $53.67 1/2 trading today on the New York Stock Exchange. The announcement was made after the close of business.
"We entered into the transaction as a result of the difference between Glenmede's investment objectives, including its desire for higher current yields, and our plan to reinvest cash flow for growth," said Oryx Chairman Robert P. Hauptfuhrer.
Oryx earned $139 million last year, but said falling oil prices in the second quarter caused it to lose $3 million in the three-month period.
Glenmede acts as trustee for the charitable trusts established by the Pew family. The decision to sell out does not reflect lack of confidence in Oryx, trust President Thomas Langfitt said.
Until last September, Oryx was mainly a domestic producer. But on Sept. 13, 1989, the company announced it would buy British Petroleum Co.'s holdings in the North Sea, Indonesia, Dubai, Ecuador, Colombia, Gabon and Italy.
The deal, eventually valued at $1.21 billion, made Oryx the world's largest independent oil company.
To pay for the stock, Oryx said it had arranged for $1.8 billion in credit to replace a $1.4 billion line. It said it would reduce the debt within a year because of increased cash flow from higher oil prices.
Oil currently is trading around $30 per 42-gallon barrel, depending on the grade, inflated by the Persian Gulf crisis. But Hauptfuhrer said Oryx could have afforded the deal before the Iraqi invasion of Kuwait.
"Assuming a reference price of $21 per barrel, set at the July OPEC meeting, we are confident that we can accomplish our financial objectives," Hauptfuhrer said. A price would translate into about $23 per barrel of West Texas Intermediate crude, he said.
"This will enable us to continue to apply advanced technologies, such as our horizontal drilling program, to find and develop new reserves," Hauptfuhrer.
Light sweet crude oil for October delivery settled 54 cents lower at $30.76 per barrel on the New York Mercantile Exchange. Contracts for later months were also down.