Mobil Seeks to Make Hostile Takeover Tougher

Mobil Corp., an oil giant with $35 billion in assets, is urging its shareholders to approve a series of corporate bylaw changes aimed at making a hostile takeover more difficult.

One measure would stagger the terms of members of the board of directors, making it impossible to unseat a majority of the board in one election.

Another proposal would limit the use of two-tier takeover offers, bids in which a bare majority of the stock is purchased under one set of terms and the remaining stock is bought for less favorable terms.

A third proposal would try to prevent the practice of greenmail by requiring a vote of shareholders to approve stock buy-backs from any shareholder who owned 5% or more of Mobil’s stock for less than two years.

Mobil said it was not aware of any specific bid for control of the company, but said its directors had “considered the recent increase in takeover activity in the oil industry.”

Mobil scheduled a special shareholders’ meeting for Feb. 22 at Fairfax, Va., to vote on proposals that it said would make it more time consuming for an unwelcome suitor to gain control and also to assure all shareholders received the same terms in a hostile takeover bid.

“The management seems somewhat threatened, or it would have no reason to do this,” said Bruce Lazier, an analyst who follows Mobil for the securities firm of Prescott, Ball & Turben.

While Mobil has not identified any suitor, Lazier said the proposal appeared aimed at takeover artists such as T. Boone Pickens Jr., the chairman of Mesa Petroleum Co., who have amassed fortunes in the pursuit of other huge corporate prey.

Just last month, Pickens led an investor group that attempted to acquire Phillips Petroleum Co.

“Mobil will be, if anything, much tougher than Phillips,”Lazier said.

Pickens group held just 5.7% of the stock of Phillips and was trying to expand its holdings to more than 20% as part of a plan to eventually gain control of the company.

After a complex court battle was launched by Phillips, the Pickens’ group agreed to withdraw its bid. But the partnership was promised a pretax pofit of $89 million on its shares, and Phillips said it would pay all of its expenses.