Boiling Oil

By winning most of the fights he got into, Tulsa Oilman William Grove Skelly built one of the nation's best-integrated, best-run independents. Nevertheless, his Skelly Oil Co. almost went under in the lean-pursed '30s. Hard-hitting, fast-thinking Bill Skelly raised the cash to save the company, but he lost control to J. Paul Getty, sporty Los Angeles oilman and Manhattan hotel owner (the Pierre). Skelly, staying on as president of his company, a subsidiary of Getty's Mission Corp., in time became Mission's president also.

Last week, Tulsans feared that Bill Skelly had won one victory too many. He had blocked the year's biggest oil merger --a $123 million union of Mission Corp. and Getty's Pacific Western Oil Co. with Tulsa's Sunray Oil Corp. The man he had beaten was his own boss, Paul Getty.

The fracas started two months ago. Getty proposed the merger in order to get his money out of the two companies. Skelly wanted no part of the deal, as it would put his big, thriving Skelly Oil under smaller, upstart Sunray. Getty gave Skelly the boot as Mission Corp.'s president.

As a stockholder of Mission, Skelly brought two federal court suits to block the merger. He charged that Getty and other Pacific Western stockholders would get $93 million in cash for their stock (Getty's share: $79 million) while Mission stockholders would only get Sunray common stock, six shares for one of Mission. Sunray stock, said Skelly, would be of "questionable value" when the merger put $125 million of debts and senior securities ahead of the common stock. Getty's reply was that, measured by current market prices of the two stocks, Mission stockholders would get far more by the exchange than they could get by selling their stock on the market.

In Carson City, Nev., Skelly got a temporary injunction preventing Getty from taking a vote of Mission stockholders on the merger. That was enough to block it through Dec. 23, which Getty and Sunray had agreed would be the deadline.

But the proposed merger had made it possible for many a stockholder--and speculator--to make a killing in the market. The merger talk, rumored in the market long before it was announced, had helped send Mission Corp. stock up from the year's low of $28 3/4to a high of $56 3/8|. Pacific Western had gone from $21 3/4 to $59 3/4. Both stocks broke sharply when Skelly won his injunction. Last week Getty and Sunray decided to call the whole deal off.

Oilmen wondered if Getty would now toss Bill Skelly out of the presidency of the company he had founded. Skelly had some ideas of his own: he threatened to bring another suit, aimed to throw Mission Corp. into liquidation and divide its holdings, including Skelly Oil, among its stockholders.

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