Icahn Triples ‘Guarantee’ in Bid for Texaco : Shareholders Could Get $300 Million, He Says

Financier Carl C. Icahn sought to bolster his takeover offer for Texaco Inc. on Thursday by raising to $300 million the money he would forfeit if he failed to raise the necessary financing.

Icahn also added a new twist, pledging that the guarantee money would be divided among all Texaco stockholders rather than go into the general treasury of the White Plains, N.Y.-based oil company.

Wall Street has been cool to Icahn’s bid of $60 a share, which values Texaco at $14.6 billion.

Texaco stock has traded $9 to $10 below Icahn’s offer since it was announced last month, and it held that level Thursday. In New York Stock Exchange trading Thursday, Texaco closed down 12.5 cents a share at $51.375.

Texaco’s board previously rejected Icahn’s bid for the 85.2% of the company’s shares he does not already own and it refused to put the matter up for a vote by stockholders at the annual meeting June 17.

Responding to Icahn’s move Thursday, the company said it “changes exactly nothing. And nothing is exactly what he is offering the Texaco shareholder.

“Because he has attached such a jungle of strings, conditions and red tape to his so-called guarantee, it doesn’t matter what number he attaches to it--he’s never put up a dime and we are convinced he would never have to.”

Triples Amount

Texaco was referring to provisions in Icahn’s proposal that the money would not be forfeited if another bid in excess of $60 per share materialized, or if the Internal Revenue Service failed to approve his proposal.

Those provisions were continued in his original bid, except that in that case, Icahn only offered to put $100 million into escrow and said it would be forfeited to the company if he could not finance the bid.

On Thursday, he said he would triple that amount--but changed the potential recipient of the money to Texaco’s shareholders, instead of the company.

“The guarantee is $1.50 in cash per share to all Texaco stockholders of record for a special stockholder meeting we are seeking,” Icahn said in a statement.

Icahn, who is Texaco’s biggest stockholder, and four colleagues are running for five board seats up for election at the company’s annual meeting.