Magazine article American Banker

Mellon Adviser Quits over Pickens Deal

Magazine article American Banker

Mellon Adviser Quits over Pickens Deal

Article excerpt

PITTSBURGH -- The former chairman of Gulf Oil Corp. has resigned from Mellon Bank's advisory board to protest the bank's helping Texas oil-man T. Boone Pickens in a hostile takeover attempt of Phillips Petroleum Co.

Jerry McAfee, who was Gulf's chairman and a Mellon director from 1976 to 1981, sent a letter to Mellon chairman J. David Barnes Monday saying that he found it unconscionable that Mellon would give a $150 million line of credit to a group headed by Mr. Pickens for the takeover bid.

"In my judgment, the proposed action by Mr. Pickens and his associates -- along with similar actions by him and others in previous situations -- is detrimental to the best interests of the nation, of American business in general, and of the banking community," Mr. McAfee wrote.

He also questioned the soundness of the loan in light of the depressed state of the oil business.

Mr. Pickens' attempt to take over Gulf earlier this year started the chain of events that led Gulf to be acquired by Chevron Corp. and end its existence as an independent company. Since then, many of Gulf's old operations have been trimmed and its former executives retired.

Mr. Pickens said in a filing with the Securities and Exchange Commission Dec. 6 that Mellon and the Texas Commerce Bank of Houston are the lead institutions in a 10-bank group that is providing him with a $1.1 billion in credit to purchase Phillips' shares at $60 a share. Mellon and Texas Commerce are also to act as agents for Mr. Pickens and his group.

Mr. Pickens has temporarily halted his takeover attempt until legal questions regarding his actions are answered. …

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