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Texaco's Stock Rises on Rumors of Takeover Bid : Holmes a Court, Pickens Reportedly Plan to Make Joint Offer for Company

May 09, 1987|DEBRA WHITEFIELD | Times Staff Writer

NEW YORK — Rumors of a possible joint takeover bid by Australian investor Robert Holmes a Court and Texas oilman T. Boone Pickens Jr. propelled Texaco's stock to the top of the New York Stock Exchange's most-active list Friday. More than 7.2 million Texaco shares were traded, and the stock finished the day at $35.50 a share, up $1.875.

Holmes a Court was rumored to have recently purchased 3 million to 8 million of Texaco's 240 million shares. Wall Street had advanced essentially the same rumor late last month about Pickens, who has declined comment. Holmes a Court could not be reached.

Texaco, citing corporate policy, declined to comment on the latest of a steady barrage of takeover and settlement rumors.

The rumors had emerged sporadically ever since a Texas grand jury handed Houston-based Pennzoil a $10.5-billion judgment against Texaco in 1985. But they have escalated with Texaco's April 12 filing for bankruptcy protection and with Pennzoil Chairman J. Hugh Liedtke's comments after the company's annual meeting last week that if a settlement didn't occur by mid-May, the stalemate may continue for years.

Would Need $17 Billion

Bankruptcy lawyers on Friday minimized the takeover talk. Citing certain bankruptcy law guarantees, they said it is exceedingly difficult for anyone to orchestrate a hostile takeover in the first 120 days after a target company has filed for court-assisted reorganization.

Wall Street securities analyst Sanford Margoshes also pooh-poohed talk of an immediate takeover. He noted that a suitor would need to raise more than $17 billion to buy Texaco and speculated that Holmes a Court is buying Texaco stock only as an investment.

Separately on Friday, Texaco said it is discussing with its two bankruptcy creditor committees a proposal to borrow about $2 billion. The company had repaid about $1 billion to its lenders shortly after it filed for bankruptcy.

Pennzoil's bankruptcy lawyers have criticized the repayment, noting that lenders will charge Texaco--and potentially its creditors--sizable loan fees that it would have avoided had it not paid off the debt. Texaco took exception to that view Friday, claiming that the bankruptcy laws required the repayment.

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