Seagram Co. began paying $92 a share to Conoco Inc. stockholders today, but Wall Street experts still expect E. I. du Pont de Menours & Co. to win the richest corporate takeover battle in history.
Seagram had planned to begin paying for Conoco stock at 12:01 a.m. today, but court challenges to the Seagram offer delayed the firm from issuing checks until early this afternoon.
Conoco, which wants Du Pont to win the bidding war, found a county court in Florida, then one in North Carolina, to rule that the Canadian distiller's $4.08 billion bid for 51 pecent of Conoco violated state liquor laws and had to be stopped. The Florida judge overturned his own order Friday after Seagram appeared in his court, and about 1:30 p.m. to day a federal judge in Raleigh overturned the North Carolina county court, allowing the Seagram offer to go forward.
Mobil Corp., the nation's second-biggest oil company, is the third suitor pursuing Conoco, the ninth-largest oil concern. But Mobil's chances were dealt a severe, probably fatal blow Friday when the Justice Department delayed Mobil's offer 10 days on antiturst grounds and gave a tentative go-ahead to the Du Pont offer.
Du Pont, whose combined cash and stock offer totals about $7.3 billion, must file a consent order with the government by Tuesday explaining what it will do about a joint venture between Conoco and another giant chemical company, Monsanto. Justice said the joint venture between Conoco and a major Du Pont competitor poses the government's only objection to a Du Pont takeover of Conoco.
Dyu Pont said it expect to reach an accord with the government. All the government will say is that no accord exists yet.
Du Pont want to buy 38.7 million of the outstanding Conoco shares for $95 a shae in cash and to exchange 1.7 shares of Du Pont stock for each of the remaining 48 million shares. As of Friday, the holders of 48 million shares of Conoco had tendered their stock to Du Pont. Assuming shareholders do not withdraw the stock -- which in Du Pont's case they can do until midnight Tuesdasy -- the firm will begin paying for it Aug. 5. About 38 million Conoco shareholders told Du Pont they wanted cash and nearly 10 million wanted stock.
Wall Street professionals said the Du Pont's 56 percent holding of Conoco stock probably assures its victory, but the victory could be costly. If Seagram ends up owning a vast amount of Conoco stock and exchanges it for Du Pont stock, the Canadian distiller will be a large minority stockholder in Du Pont and cold extract some major concessions from the nation's biggest chemical company.
Mobil, which is willing to pay $8.2 billion in cash and securities for Conoco, cannot begin paying until at least Aug. 10. The threat of the government canceling the Mobil deal on antitrust grounds has convinced most investors to send their shares to either Du Pont or Seagram, even though Mobil said it will pay $105 a share for up to 43.5 million shares.
Last Sunday Seagram, which will pay cash for up to 44.35 million shares, had 17 million shares of Conoco on hand. All the Canadian distiller would say today is that it had fewer than 44.35 million shares on hand, that it did not expect to receive that many by midnight, and that it would pay on a first-come, first-served basis for all shares it receives after today. The Segram offer is supposed to end Wednesday. Shareholders can send stock to Mobile until Aug. 13 and to Du Pont until Aug. 17.
The biddidng for Conoco has been expensive, but there's a reason: the value of oil reserves held by Conoco is estimated at $140 or more a share, and Conoco has extensive coal reserves as well.