SAN ANTONIO -- Billionaire Kirk Kerkorian's Tracinda Corp.on Monday criticized a poison pill plan adopted by Tesoro Corp., saying the plan "negatively impacts all Tesoro stockholders." Tesoro Corp.'s board said last Wednesday that it would not make any recommendation to the oil refiner and marketer's stockholders regarding a tender offer made by Tracinda Corp., but subsequently adopted the stockholder rights plan known as a "poison pill"aimed at preventing a hostile takeover.
Tracinda said in a statement cited by The San Antonio Express-News that it [image-nocss] is weighing alternatives to Tesoro's plan. Tesoro responded at midmorning Monday with a statement that said, "The board believes the rights plan is in the interest of all stockolders."
Tesoro's board approved the plan that seeksto deflect an unsolicited takeover by issuing more stock.
Beverly Hills, Calif.-based -based Tracinda said Tesoro's plan isn't a good deal for shareholders because it "restricts their ability to freely vote or sell their shares" and would dilute the value of stock owned by all shareholders, including Tracinda itself, said the report.
Earlier this month, Tracinda launched a tender offer for 21.9 million Tesoro shares for $64 each, a 12% premium over the previous day's closing price. Tracinda disclosed at that time that it had earlier acquired about 4% of Tesoro's shares.
San Antonio-based Tesoro responded with the shareholder rights plan, which becomes effective when an investor amasses 20% of the company's stock. If Tracinda's tender offer is successful, though, it would fall short of the 20% stake, owning 19.98% of the refiner's shares.
Tracinda's offer expires December 6, unless it is extended, the report said.
The poison pill plan also includes a provision that holders of stakes of 10% or more can request a special meeting to exempt a "qualifying offer" from triggering the rights plan, added an Associated Press report.
Tesoro is an independent refiner and marketer of petroleum products. Tesoro, through its subsidiaries, operates seven refineries in the western United States with a combined capacity of approximately 660,000 barrels per day. Tesoro's retail-marketing system includes more than 900 branded retail stations, of which more than 445 are company owned under the Tesoro, Shell, Mirastar and USA Gasoline brands.
Click here for more details from Tesoro.
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