Measures to Bar Takeover OKd at Mobil : Chairman Says Firm May Still Spin Off Some Operations
Shareholders of Mobil Corp. voted Friday to approve measures designed to thwart a hostile takeover of the nation’s second-largest oil concern.
Mobil said that 79% or more of the 351.6 million shares that were cast at the special meeting in Fairfax, Va., voted in favor of each of the measures.
Mobil nhas a total of 407.7 million shares outstanding.
Separately, Mobil Chairman Rawleigh Warner Jr. reiterated Mobil’s previously disclosed plans to evaluate the possible spinoff of certain Mobil operations.
He said Mobil would be advised on the matter by the investment firm of Goldman, Sachs & Co.
Stock Rises on NYSE
Mobil, with about $35 billion in assets, has interests in retailing, paperboard packaging and chemicals in addition to oil.
Although Mobil’s plans were disclosed earlier, the stock market reacted favorably to Warner’s comments. Mobil’s stock jumped $1.875 a share to $29 in New York Stock Exchange composite trading.
Last month, Mobil’s new president, Allen Murray, said in an interview with Associated Press that each segment of Mobil’s operations was being measured against the top competition in its field with a view toward either giving the business the money it needs or divesting it.
“Only the top, the most efficient, are going to survive,” Murray said.
As for the anti-takeover bylaws, Mobil had said that it was not aware of any specific bid being mounted against the company but that the anti-takeover measures were proposed because of the “recent increase in takeover activity in the oil industry.”
Staggered Terms for Directors
The measures approved by the shareholders included:
- Staggering the terms of members of the board of directors, making it impossible to unseat a majority of the board in one election.
- Limiting the use of two-tiered takeover offers, bids in which a bare majority of the stock is bought under one set of terms and the remaining stock is bought for less favorable terms.
The provision is aimed at providing all stockholders with the same terms.
- Prevention of the practice known as “greenmail” by requiring a shareholders vote to approve stock buy-backs from any shareholder who has owned 5% or more of Mobil’s stock for less than two years.
Greenmail refers to the practice of a company buying back a shareholder’s stock at a premium in order to head off the stockholder’s threat to take over the company.
Pessimistic View of Industry
Shareholder advocates complain that greenmail provides a select stockholder with a bonanza for his shares while other stockholders are deprived of considering the same offer.
On another subject, Warner gave a downbeat assessment of the oil industry during the shareholders meeting.
“It’s going to be, for the next two or three years, a difficult time for the oil industry,” Warner said, citing weak markets and a worldwide surplus of crude oil and petroleum products.
Mobil has sold more than $1 billion worth of assets over the past 18 months “that we felt weren’t giving us the kind of return” desired, Warner said.
Warner also noted that Mobil’s Montgomery Ward subsidiary was “doing better” but “not adequately.”
In 1984, Mobil earned $1.27 billion, or $3.12 a share, on revenue of $60.6 billion.
