DSC Chairman Explains Why Merger Fell Through
DALLAS (AP) _ The chairman of Diamond Shamrock Corp. said Tuesday his board of directors spurned a merger with Occidental Petroleum Corp. because they were unhappy about the fate of Shamrock managers in the new company and the margin of profit for Shamrock shareholders.
The merger, which would have created the nation’s seventh largest oil company, fell apart Monday afternoon, just hours after the heads of both companies announced a tentative agreement.
Diamond Shamrock Chairman William Bricker said the plan initially seemed to offer great benefits for Diamond Shamrock shareholders.
He said the proposed merger also had the blessing of top executives with both companies. But Bricker said he changed his mind about the deal during discussions with his board Monday.
Bricker said the $3 billion stock-swap plan was conceived last Wednesday, when he was talking to Occidental Chairman Armand Hammer about another matter.
Word of the negotiations quickly spread among Wall Street, Bricker said.
The rumors put the participants under ″tremendous and unnecessary pressure″ to go public while the merger discussions were still in the early stages, he said.
By the time the board met Monday, trading in the stock of the two marriage partners had nearly halved the premium he first thought Diamond Shamrock shareholders would get, Bricker said.
Bricker told the Dallas Times Herald that the Diamond Shamrock board got its first look at the plan when they met Monday.
The Diamond Shamrock board was also concerned about the small role its managers would play in the merged company, Bricker said.
Bricker said there were never plans for him to take a role in the new company ″in any shape or form.″ He said had agreed to leave the company for $5 million.
Hammer, the 86-year-old Occidental chairman has in recent years ousted half a dozen top Occidental officers with whom he did not agree and was considered unlikely to relinquish his iron grip on Occidental.