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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Mesa Shareholder Revolt Quelled Settlement Stops Attempt To Oust Pickens As Chairman

Associated Press

A rebellious group of Mesa Inc. shareholders on Thursday backed away from threats to oust Chairman Boone Pickens and the natural gas company agreed to raise cash by next spring.

Mesa agreed to seek asset sales or outside investment by the May 1996 annual meeting, but the shareholders said they would again challenge Pickens if the company doesn’t live up to the agreement.

Also, the dissidents’ ringleader, David Batchelder, quit the Mesa board and is to be replaced by one of his business partners.

Under terms of the agreement, Mesa must achieve a property or asset sale of $640 million; an equity infusion of $250 million; a joint venture of $350 million; or any combination of those options. Financial adviser Lehman Brothers Inc. also must say the offer is fair.

Earlier this year, Mesa had been offered $750 million for its rich natural gas properties in western Kansas’ Hugoton field. Mesa rejected the bid as too low in June, precipitating the shareholder battle. However, representatives of the group privately took credit for forcing Mesa to take action to enhance shareholder value.

Mesa, based in the Dallas suburb of Irving, now is showing interested companies information about the Hugoton properties, and intends to provide information about the entire company within 10 days. The company hopes to receive all bids by late November or early December, and have a course of action set by year’s end, spokesman Jay Rosser said.

The settlement came a week before a federal court hearing into competing claims between Mesa and the dissident group, made up of former Mesa president Batchelder and wealthy investors Marvin Davis and Dennis Washington.

Joel Reed, a principal of Batchelder’s San Diego investment firm will succeed Batchelder on Mesa’s board. Dorn Parkinson, the other Washington representative, will remain on Mesa’s board.