a. What was the purpose of the Unocal selective stock repurchase? b. Why did the board care

Question:

a. What was the purpose of the Unocal "selective stock repurchase"?
b. Why did the board care if Mesa took over the company?
c. According to the court, what is the board's obligation in this situation?
d. Did it act in the best interests of the corporation's shareholders?
e. What about the other the court mentions: creditors, customers, employees, and the community?
f. Why would the community care?
g. Traditionally, under corporate law, the board's primary responsibility was to act in the best interests of the corporation's shareholders. Since when is the board supposed to consider other and long term investors over short term speculators?
h. Was the board really acting out of concern for shareholders and ?
Mesa Petroleum Co. offered to purchase 64 million shares of Unocal's stock at a price of $54 per share. Upon merger of the two companies, Mesa planned to exchange the remaining Unocal shares for "junk bonds" that Mesa (but no one else, including the court) valued at $54 per share. Unocal's investment bankers advised the board of directors that any offer of over $60 per share would have been reasonable. The board rejected the Mesa offer and then made its own competing offer of $72 per share to all shareholders except Mesa (called a "selective exchange offer"). This offer effectively preempted Mesa, because no shareholder would accept the $54 Mesa offer when the $72 Unocal offer was also available. The Delaware court issued a temporary restraining order against Unocal's offer unless it included Mesa. Stakeholders
A person, group or organization that has interest or concern in an organization. Stakeholders can affect or be affected by the organization's actions, objectives and policies. Some examples of key stakeholders are creditors, directors, employees,...