The main battle was expected to take place between SOCAL and ARCO. The latter was confronted with substantial debts and could only bid as much as $75.00 per share. Keller had doubts about the actual amount of money he could bit. His company had limited debts and they could easily receive a bank loan. But there rose the question of whether the Golf Oil Corp. stocks were worth the additional risks and whether they represented a secure source of future profit.
However, the outcome of the bidding was a surprise to most participants to the auction, as the winner was declared small company Mesa Petroleum. Throughout this biting, Mesa Petroleum had increased their share in Gulf Oil up to 13.2%.
But Boone Pickens' objective was to enter the corporation's board of directors and participate to the decision making process. Further on, Pickens borrowed $300 million and purchased 13.5 million shares, adding up to 21.3% of the...
Their corporation's growth after the transaction has materialized the company's partial repurchase of the previously sold stocks.
The company that now possessed 21.3% of Gulf Oil's stocks was an old competitor of the corporations'. The two companies, represented by Mesa CEO Boone Pickens and Gulf Oil's CEO James Lee had previously bid against each other in order to purchase Cities Service, auction lost by both companies.
Even if James Lee's motto was "discoveries and acquisitions," in the year prior to the big auction (1984), Gulf Oil Corporation's CEO decided to cut down on the funds destined to new discoveries in the area of oil. He based his decisions on the popular belief that in the near future, the international petroleum price would remain the same, and as such the company could not generate additional profits to invest in new technologies.
Pittsburgh Post Gazette, February…
