An investor group led by oilman T. Boone Pickens said Wednesday that it will cash in its 8.9 million shares of Phillips Petroleum Co. stock for $53 a share in cash, realizing a pretax profit of $89 million.
Pickens said the stock sale also would mean an opportunity for additional income for Phillips' 200,000 other shareholders.
He estimated that, since his group began buying Phillips stock last October, the market value of the shares held by the other stockholders has climbed $18 a share, or by $2.8 billion.
On Wednesday, Phillips stock gained 62.5 cents to $49.875 a share, with more than 3.2 million shares changing hands.
Part of Settlement
The stock sale was part of a settlement reached last December, when Pickens' Mesa Partners group agreed to end a hostile bid for Phillips.
Later, another bid was launched for Phillips by financier Carl Icahn. Icahn dropped his bid Monday and is expected to realize a pretax profit of $40 million from his 7.5 million shares.
Pickens, chairman of Mesa Petroleum Co. of Amarillo, Tex., joined with Wagner & Brown, an independent oil company in Midland, Tex., to buy its shares for an average price of $43 a share.
When it agreed last Dec. 23 to end its pursuit of Phillips, the partnership was granted the right to sell its stock back to the company for $53 per share in cash.
Phillips also agreed to reimburse the partnership for up to $25 million in expenses.
Mesa had to put off a decision on what to do with its stock until after Phillips shareholders voted on a company plan to restructure the company. Phillips announced Sunday that its plan was voted down and also unveiled an improved offer, in which the company will buy back up to 72.5 million shares of its stock with securities valued at $62 a share.
Phillips also plans to distribute a new issue of preferred stock to its remaining shareholders and to increase its dividend on common stock.