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Elf Board Rejects TotalFina’s Bid

July 23, 1999

PARIS (AP) _ Elf Aquitaine’s board of directors today rejected a takeover bid by TotalFina and the petroleum giant’s chief flatly rejected any ``under-the-table negotiations″ to reach a deal.

All of Elf’s board members rejected TotalFina’s bid and recommended that Elf shareholders not tender their shares, Elf said in a statement.

French stock market regulator Conseil des Marches Financiers said TotalFina’s $42.81 billion all-share bid for rival Elf launched July 5 was officially opened Wednesday.

Now that Elf has filed its official response, the CMF is expected to set a closing date for the bid.

TotalFina is offering four of its shares for three Elf shares. The company said its offer is conditional on gaining control of 66.67 percent of Elf.

Late Sunday, Elf defended itself by launching a $50.97-billion bid for TotalFina, offering three of its shares plus cash for five of TotalFina’s.

However, the big difference is that Elf proposed to spin off the groups’ chemicals business into a separate company.

The head of TotalFina, Thierry Desmarest, on Thursday suggested that the two companies seek a ``friendly solution″ to the growing hostility.

Elf President Philippe Jaffre said in an interview published today that he won’t engage in any informal talks to resolve the problem.

``There will be no under-the-table negotiations nor arrangements in a corner,″ Jaffre told the financial daily Les Echos. ``The discussion on the industrial project, on the creation of value for shareholders, precedes any reflection about the management structure.″

In an interview published Thursday in Les Echos, Desmarest said he was hoping for a ``rapid ... friendly″ solution.

``I think the affair should be completely settled sometime in September,″ he said.

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