Tracinda Corp. said it iswithdrawing its offer for a minority stake in oil refiner Tesoro Corp., citingTesoro’s plan for a “poison pill,” according to various news reports. Tesorosaid in a statement it was “surprised” by Tracinda’sdecision to withdraw its offer yesterday.
Tracinda, a holding company forbillionaire Kirk Kerkorian, withdrew its cash tender offer of $64 a share forup to 21.875 million shares, or 16%, of Tesoro yesterday morning. Tracindacited the Tesoro’s plan for a “poison pill.”
Tesoro, a San Antonio owner ofpetroleum refineries, said it has a long-standing value creation strategy inplace to focus on growth opportunities, initiatives and acquisitions.
Tesoro said the shareholder rightsplan was intended to reduce the likelihood a potential acquirer could gaincontrol of the company without paying a premium to every shareholder. Therights plan comes into effect at 20% ownership, which is more than whatTracinda had considered in its tender offer.
Tracinda, an investment vehicle ofbillionaire Kirk Kerkorian, previously had offered to buy as much as a 20%stake in Tesoro for $64 a share. However, after Tesoro’s board adopted a poisonpill, or shareholder-rights plan, last week to avert the potential takeover,the offer became less palatable.
Poison pills are designed to makethreatened takeovers more expensive through the issuance of huge amounts ofstock to existing shareholders.