why was Gulf Oil Corporation was attacked for takeover in 1984? What are the
sources of value bidders hope to reap from the acquisition of Gulf Oil
Corporation?

By the early 1980s, T. Boone Pickens had arrived at the conclusion
that acquiring other companies was more profitable than oil expiration
and production.  He found that he could identify undervalued
companies, acquire a stake in them, and then sell his holdings at a
profit once others recognized their value.  His company, Mesa
Petroleum, purchased 11% of Gulf Oil in 1983.  "Pickens then launched
a proxy fight with Gulf for control of a company he viewed as poorly
managed. Gulf's management offered Pickens a "greenmail" premium, an
amount paid by a target company to repurchase its stock from a
corporate raider, but he refused. Eventually, Socal Oil merged with
Gulf in the largest merger in corporate history to date, and Pickens
and his investors profited $760 million before taxes by tendering
their shares to Socal."

"T. Boone Pickens" by Keli Flynn, Famous Texans
http://www.famoustexans.com/boonepickens.htm

"Gulf executives fought Boone's takeover and eventually invited
takeover offers from other companies and collections of investors. On
March 5, 1984, the Gulf board voted to sell the company to Chevron
(Standard Oil of California) for $13.2 billion. Gulf operations were
merged into Chevron in what was the largest corporate merger to date."

"Gulf Oil Corporation" by James A. Clark and Mark Odintz, The Handbook
of Texas Online (June 6, 2001)
http://www.tsha.utexas.edu/handbook/online/articles/GG/dog2.html

"The forced buyout of Gulf Oil was a controversy that reached all the
way to the U.S. Congress and business talk shows. Never before had a
"small operator" successfully taken apart a Fortune 500 company."

"Gulf Oil" by John M. Grohol, Enpsychlopedia (September 13, 2005)
http://www.grohol.com/psypsych/Gulf_Oil

Pickens believed that Gulf Oil was wasting shareholders money in a
desperate bid to replace its reserves by exploring frontier areas of
North America.  The company was experiencing no success, yet Pickens'
believe management was determined to continue what he viewed as
fruitless exploration.  In his opinion, the company's failure to
replace its reserves through other means, such as acquisition, had
caused a sizable loss in shareholder value.  He felt that management
had not viewed the need to replace reserves as being an urgent
problem.  In his own words:

"THE SHAREHOLDERS OF THESE COMPANIES ARE TRAPPED UNLESS THEY CAN
CONVINCE MANAGEMENT TO TAKE ACTION TO ENHANCE VALUE.

AND THERE'S THE REAL PROBLEM ? GETTING MANAGEMENT TO DO SOMETHING
BEFORE IT'S TOO LATE.

MOST OF THE MANAGEMENTS AREN'T CONCERNED ABOUT THE URGENCY OF THE
SITUATION BECAUSE THEY AREN'T SHAREHOLDERS, THEMSELVES.

AND GULF OIL IS A PRIME EXAMPLE OF THAT SAME ATTITUDE. 

AS I SAID EARLIER, THEIR RESERVE BASE HAD BEEN DECLINING FOR 12 STRAIGHT YEARS. 

YET, DIVIDENDS HAD BEEN INCREASING FOR 10 YEARS AND SALARIES HAD BEEN
GOING UP FOR 8 YEARS.

IF NOTHING HAD BEEN DONE AT GULF OIL, THE COMPANY WOULD NOT HAVE BEEN
ABLE TO PAY ITS $3 DIVIDEND IN 1989.

BUT DID ANYONE KNOW EXCEPT MANAGEMENT? 

OF COURSE NOT. 

AND WERE THEY CONCERNED?"

"GULF OIL {Strickent text: CORPORATION} IS JUST ONE EXAMPLE OF A
SITUATION THAT IS WIDESPREAD IN CORPORATE AMERICA: MANAGEMENT HAS LOST
SIGHT OF THE SHAREHOLDER."

"REMARKS TO GUARANTY BANK 'THE SHAREHOLDER KEY TO THE PETROLEUM
INDUSTRY'S FUTURE'" T. Boone Pickens, Jr., Boone Pickens (July 24,
1984) http://digital.library.okstate.edu/Pickens/1984/072484A1.html

Therefore, T. Boone Pickens believed that he could unlock value in
Gulf Oil by stopping what he believed was a futile exploration effort
and replacing it it with a program to increase reserves through
acquisition of other companies and other expense controls.

Sincerely,

Wonko

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