Tesoro board remains neutral on Kerkorian offer, OKs stockholder rights plan

By Lisa Kerner

Charlotte, N.C., Nov. 21 - Tesoro Corp.'s board of directors said it will remain neutral and not make any recommendations to its shareholders regarding Tracinda Corp.'s tender offer.

On Nov. 7, Tracinda began a $64-per-share cash tender offer for up to 21,875,000 shares, or 16%, of the outstanding shares of Tesoro. The offer is slated to end at 11:59 p.m. ET on Dec. 6.

As previously reported, if the full amount of shares is purchased in the offer, Tracinda's sole shareholder Kirk Kerkorian would beneficially own 27,375,000 shares, or some 20%, of the San Antonio-based petroleum refiner.

Tesoro's board did unanimously adopt a stockholder rights plan designed to reduce the likelihood that a potential acquirer would gain control of Tesoro without paying a premium for all of the company's shares. Each stockholder of record on Dec. 3 will receive a dividend of one right for each outstanding share of common stock held, a company news release stated.

The plan features a threshold for triggering exercise of the rights plan at 20% of the outstanding shares of Tesoro common stock.

"We have a long-standing value creation strategy in place, focused on operational excellence initiatives, system synergies, organic growth opportunities and growth by acquisition which has increased shareholder value 70% over the past year and more than 200% over the past three years," Tesoro chairman, president and chief executive officer Bruce A. Smith said in the release.

"As one of the largest independent refiners on the West Coast, we believe we are uniquely positioned to continue to deliver exceptional value to our shareholders."

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