TULSA, Okla. — Carl Icahn proceeded Wednesday with his $8.06-billion bid to acquire Phillips Petroleum Co. after a federal judge in Oklahoma removed some legal obstacles that had threatened to delay the New York financier.
Wall Street sources, who spoke on condition that they not be identified, said Icahn was pursuing commitments to raise $4 billion to finance the first step of his takeover plan.
Such a line of credit would cost Icahn an estimated $15 million to $20 million to set up, an indication that he is serious about the bid, the sources said.
Icahn refused to discuss his plans.
Earlier, his bid was in danger of being derailed after separate Oklahoma district courts in Pryor and Bartlesville issued similar temporary orders blocking him from proceeding with his offer pending hearings next week.
But U.S. District Judge H. Dale Cook, presiding over the Phillips-Icahn legal battle in federal court in Tulsa, issued a temporary order Wednesday afternoon that specifically put the Pryor court's actions on hold and also deferred enforcement of any similar state court ruling.
Cook said he would hear arguments on the issue Friday and said Icahn could proceed in the meantime.
James P. Linn, an Oklahoma City lawyer representing Icahn, argued that the state courts were illegally restraining interstate commerce.
Linn also said he expected to be back before Cook to challenge a bill, passed Wednesday by the Oklahoma House and quickly signed into law by Gov. George Nigh, which would make oil company takeovers more difficult.
Linn, who called the measure unconstitutional, said he would ask Cook to overturn the measure.
Meanwhile, Icahn disclosed in a filing with the Securities and Exchange Commission in Washington that he plans to seek shareholder approval for the removal of the current Phillips board of directors and that he seeks to solicit shareholder votes against Phillips' own restructuring plan.
Independent outside directors of Phillips--those board members who do not work full time for the company or rely on their director fees to maintain their standard of living--issued a statement recommending approval of the company's restructuring plan as "clearly in the best interests of all the shareholders."
In heavy trading Wednesday on the New York Stock Exchange, Phillips stock fell 50 cents to $49.50 a share.
The suit in Mayes County District Court in Pryor was filed by three wholesalers of Phillips products who alleged that their livelihoods would be threatened by a takeover. The lawsuit in Washington County District Court, across the street from Phillips' headquarters in Bartlesville, was filed by five shareholders who claimed that Icahn's bid violated Oklahoma securities law.
"We believe the orders are invalid," said Mark Belnick, an attorney for Icahn in New York. "They are patently unconstitutional."
The orders came as Icahn was launching an offer of $60 a share in cash for 70 million shares of Phillips stock. If successful, that would raise his stake in Phillips from a current 4.85% to just over 50%.
Icahn has said that he intends to acquire the remaining stock for debt securities with a value of $50 a share.
However, his offer is conditioned upon arranging financing, shareholder defeat next week of Phillips' own proposed restructuring and defusing of a "poison pill" takeover defense erected last week by Phillips.
The defense tactic, known as a poison pill because it is designed to make Phillips too expensive to be acquired by a hostile suitor, would place a price tag of nearly $9.6 billion in cash for the company.