Delaware Court Says Unocal Buy-Back Can Exclude Pickens

The Delaware Supreme Court reversed a lower court today and held that Unocal Corp. may exclude oilman T. Boone Pickens Jr. and his partners from participating in a lucrative stock buy-back program.

The offer to repurchase 50 million shares, or 29% of Unocal’s stock, with securities valued at $72 a share is a cornerstone in Unocal’s efforts to derail a hostile bid by Pickens to gain control of the nation’s 13th-largest oil company.

Earlier, Pickens had obtained a preliminary injunction from a Chancery Court in Delaware, where Unocal is incorporated, to prevent Unocal from going through with the stock buy back unless his group was allowed to take part.

But the higher court, saying Unocal’s action was within the confines of “reasonable business practices,” overturned the injunction on appeal.