Phillips adopts shareholders rights plan, viewed as takeover target

Petroleum News Alaska Staff

Phillips Petroleum Co., considered by many oil analysts to be the industry’s next big takeover target, said July 2 that its board has adopted a shareholder rights plan to replace the one that was to expire in late July.

The Bartlesville, Okla., oil company said the new shareholder rights plan is similar to the one it is replacing and was not adopted in reaction to a specific takeover threat.

Analysts have predicted that Chevron Corp. and Texaco Inc. are likely candidates to make a bid for Phillips.

“The rights are designed to assure that all Phillips stockholders receive fair and equal treatment in the event of any proposed takeover of the company, and to guard against abusive tactics to gain control of Phillips without paying all stockholders a premium for that control,” Phillips Chief Executive and President Jim Mulva said in a statement.

Under the new plan, Phillips board declared a dividend distribution of one preferred share purchase right on each outstanding share of the company’s common stock if a person or company acquires 15 percent or more of Phillips’ shares. The board also is authorized to reduce the amount to 10 percent.

The new plan is designed to encourage anyone looking at taking control of Phillips to negotiate with its board before making a move to acquire stock.

The rights will expire on July 31, 2009.