Mesa to Seek Injunction Against Unocal

Sending out a message that it has no intention of retreating from the fight for Unocal, Mesa Petroleum said Sunday that it will seek a court injunction today to prevent Unocal from immersing itself in debt in order to stave off a takeover bid by a Mesa investors group.

David Batchelder, Mesa’s chief financial officer, said the Mesa group, which has offered to buy Unocal in a two-step tender offer, is asking that Unocal’s “highly conditional poison pill” offer for 49% of Unocal’s stock be declared invalid. The request will be filed today in Delaware Chancery Court as an amendment to a lawsuit filed 10 days ago seeking to overturn recent Unocal bylaw changes.

The amendment also seeks damages from certain Unocal directors, including Unocal Chairman Fred L. Hartley, of $1.569 billion in the event that the Unocal exchange offer is consummated. That figure represents the difference between Mesa’s $54-per-share offer and Unocal’s $72-per-share offer for the 87.2 million shares that would remain if the Mesa group succeeds with the first step in its two-tier bid for Unocal.

Unocal had no immediate comment because it has not yet seen the amended lawsuit.

Analysts have increasingly characterized Mesa’s chances of walking away with Unocal as slim or none. But sources close to the Mesa takeover team say Mesa executives don’t yet think a sweetened offer is necessary. “They really believe shareholders understand there is only one real offer on the table, and besides, Hartley will have blood on his hands if he doesn’t do something to keep at least seven to 10 of the points” Mesa has added to the Unocal stock by making the takeover offer, the source said.