Pill popper

27 November 2007 By Cyrus Sanati

The takeover defence adopted by Tesoro allowed the wily billionaire to withdraw his tender offer for 16% of the US oil refiner. With refining shares plunging since he kicked the deal off, Tesoro s board gave Kerkorian an out at shareholders expense.

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Kirk Kerkorian's Tracinda Corporation announced Tuesday that it was withdrawing its $1.4bn tender offer for 16% of US oil refiner Tesoro. Tracinda says it withdrew the offer, because Tesoro's board instituted a shareholder right's plan (poison pill) that it believed would have a negative impact on Tesoro's shareholders, including Tracinda.

Tesoro's shares fell 7% on the news. The stock is now down 13% since Tracinda made the tender offer on October 26th. The Standard and Poor's refining and marketing index and rival US refiner Valero are down 14% and 15%, respectively, over the same time period.

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