Developer’s Minority Directors Reject Chevron’s Buyout Offer

Chevron Corp. said Friday that its $65-million offer to purchase the 34% of the Huntington Beach Co. that it doesn’t already own has been rejected by the land development company’s directors.

San Francisco-based Chevron had offered to exchange $650 worth of Chevron stock for each of the 100,000 shares of the Huntington Beach Co. held by the minority shareholders. The giant oil company said in a prepared statement that its bid was rejected Friday in a letter from a special committee of Huntington Beach Co. directors. The letter said that, while a merger would be in the best interests of Huntington Beach Co. shareholders, the price offered by Chevron was too low.

Officials of neither company could be reached Friday for comment.

In its statement, Chevron said it “would continue to evaluate its ownership position in Huntington Beach and the alternatives open to it, such as revising the merger proposal, continuing with its current majority ownership arrangement or pursuing a sales arrangement with a third party.”

In April, immediately after Chevron offered to buy out the Huntington Beach Co.’s minority owners, a Newport Beach investment banker and company minority shareholder contended that the offer undervalued the company by almost 55%.

John H. Norberg, a partner in the investment firm of Diehl & Co., said his preliminary study showed that the Huntington Beach Co. was worth more than $353 million, or $1,180 per share--not counting the value of its oil reserves.

Norberg said that at the Huntington Beach Co.’s annual shareholders’ meeting in May, the four families who together control about 75% of the shares not owned by Chevron called for an independent appraisal of the Huntington Beach Co. by New York-based Bankers Trust Co.