Could Unocal make an offer to buy stock from all shareholders except Mesa? In making this offer, did Unocal have the right to consider the interests of other stakeholders?

Mesa Petroleum Co. offered to purchase 64 million shares of Unocal’s stock at a cash 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 the Mesa proposal was wholly inadequate and that an 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. (This type of offer is called a “selective exchange offer.”) The board’s 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 preliminary injunction against Unocal’s offer unless it included Mesa.