Coastal Aims to Sell Texas Eastern's North Sea Properties if Bid Succeeds
HOUSTON -- Coastal Corp. said it would sell the lucrative North Sea oil and gas properties of Texas Eastern Corp. -- worth upwards of $1.5 billion -- if its proposed $2.49 billion takeover is completed.</br></br>Late yesterday afternoon, Coastal said it formally delivered its $42-a-share offer to Texas Eastern and filed it with the Securities and Exchange Commission. A Coastal spokesman said small hitches in the documentation forced a delay, and that some last-minute changes had to be made.</br></br>Nevertheless, Wall Street believed some deal would go through, as Texas Eastern's stock continued to trade above the offer price. In New York Stock Exchange composite trading yesterday, it closed at $46.375, up $1.375 on volume of 4.9 million shares.</br></br>"Clearly the market is saying the price is too low," said one mergers specialist in Houston. "I'd look for something at least 10% higher than the market price."</br></br>Stock market traders said a number of scenarios are possible, including Texas Eastern finding a friendly acquirer or recapitalizing. In a previous takeover fight, Texas Eastern acquired a third party to help remain independent. In any case, Coastal by its own admission has played hard ball in a number of takeover situations.