The Getty Oil takeover battle between Texaco and Pennzoil was probably one of the ugliest in Wall Street's history. In 1984, Texaco swooped in at the last minute with a winning bid before Pennzoil was able to finalize an already agreed-upon deal with Getty Oil.
A furious Pennzoil filed suit and started a bitter legal feud that lasted for the following four years, which pushed Texaco into bankruptcy, until a settlement of $3 billion, brokered by Carl Icahn, was reached. At the time, Cal Icahn, a noted corporate raider and financier, accumulated over 13% of Texaco's stock in a failed attempt to take control of the board.
However, the settlement, in which Icahn acted as a catalyst, removed the dark clouds hanging over Texaco and Pennzoil. As a result, both companies were able to move on and refocus on business. The resulting gains in stock prices also got Icahn some sizable financial windfall.
In the end, the biggest winners of all were the law firms, as Texas lawyer Joseph Jamail (whom Icahn mentioned in the video below) reportedly got $600 million for leading Pennzoil's attack against Texaco.
Here is a rare video of Carl Icahn recounting the event at Caroline's Comedy Club in Manhattan, New York. (Warning: a bit PG-13 at around 1:21 and the very end of the clip.)
Dian L. Chu