Kerkorian's Tracinda Rejects Tesoro 'Poison': WSJ

Tracinda it is withdrawing its offer for a minority stake in oil refiner Tesoro, citing Tesoro's plan for a "poison pill", the Wall Street Journal reports. Tracinda is the investment vehicle of billionaire Kirk Kerkorian.

Tracinda had previously offered to buy as much as a 20% stake in Tesoro for $64 a share. However, after Tesoro's board adopted a poison pill, or shareholder-rights plan, last week to avert the potential takeover, the offer became less palatable.

Poison pills are designed to make threatened takeovers more expensive through the issuance of huge amounts of stock to existing shareholders.

"The rights plan recently adopted by the Tesoro board of directors inhibits value for all Tesoro shareholders by, among other things, restricting the ability of shareholders to vote, sell or acquire Tesoro shares freely without fear of triggering the draconian provisions of the rights plan," Tracinda said.

According to the Journal, the plan will kick in when an investor acquires a 20% stake in the company. Tracinda's offer would have fallen just under that threshold. The plan lasts three years, with a board committee to assess annually whether the plan remains in the best interests of shareholders.