Mesa Board Sets Rules For Sale Directors Take ‘Poison Pill’ To Respond To Hostile Offer

Mesa Inc.’s board voted Thursday to consider a sale or merger following pressure from an investor group threatening to wrest control of the natural gas company from founder Boone Pickens.

The directors also adopted a “poison pill” takeover defense plan, which is designed to make an unwanted takeover prohibitively expensive by allowing shareholders to buy stock at half price if there is a raid on the company.

A dissident shareholder group led by former Mesa president David Batchelder and including billionaire Marvin Davis of California and industrialist Dennis Washington of Missoula had pushed the company to consider a sale or merger.

Davis and Washington disclosed last week that they own 9.4 percent of Mesa’s stock and said they could try to unseat the directors if the company didn’t pursue options to maximize stock value, including a sale or merger. Washington has two representatives on the 10-person board.

He first revealed an interest in Mesa last December, when he filed documents indicating he might purchase up to $15 million - almost 5 percent - of the company’s stock.

In 1993, Washington succeeded in a similar takeover bid when one of his Montana subsidiaries merged with San Diego-based Kasler Corp., a construction company.

That year, his Washington Corporations had sales of $629 million according to Hoover’s Guide to Private Companies.

In a special three-hour meeting, Mesa said its directors reaffirmed their commitment to restructuring the company while it considers sale or merger opportunities. It said it has hired Lehman Brothers Holdings Inc. to explore possible alternatives.

“In addition to pursuing this restructuring, we will expand our review of strategic alternatives to include a sale or merger of the company to see if that would provide the best economic results for shareholders,” Pickens said.

However, Pickens said he is opposed to a quick deal that would unload the company by the end of the year.

“We will not be forced into limiting our options simply to respond to David Batchelder’s arbitrary and self-serving timetable,” he said.