PENNZOIL <PZL> WILL CONSIDER SETTLEMENT OFFER
Pennzoil Co Chairman J. Hugh Liedtke
told a meeting of securities analysts that the company will
consider any realistic settlement offer in its 11.0 billion dlr
ongoing litigation with Texaco Inc <TX>.
    "I wish I could tell you that I am optimistic about the
chances (of a settlement), but I am not," Liedtke said. "I
assure you, however, that we will continue to try."
    He said that Pennzoil has made a number of settlement
offers to Texaco both before the litigation commenced and
after, but the offers were repeatedly rejected. He said Texaco
has made no realistic offers.
    Earlier this year, a Texas court of appeals upheld
Pennzoil's claim against Texaco, ruling that Texaco unlawfully
interfered with Pennzoil's merger agreement with Getty Oil.
Texaco subsequently acquired Getty.
    Liedtke said it has become more difficult to settle the
case because the courts continually rule in its favor, raising
the stakes of any agreement.
    "Each time this goes up (to a higher court), the
expectations of our shareholders goes up and it puts us in an
increasingly difficult positon," he said.
    "We cannot afford to settle this case for a pittance,"
Liedtke told the meeting of analysts.
    "We don't want to get sued for not fulfilling our fiduciary
responsibilities," he said.
    Liedtke also said that the company would not settle for
less than two billion dlrs, which has been suggested by a
number of Wall Street analysts.
    He did say, however, that Pennzoil would entertain any
proposal from Texaco including a possible preferred stock
position in TExaco.
    "I won't assume we'll take it," he said. "But we'd consider
it." But he added that he thought it would be extremely
difficult to work out a settlement made up of stocks, bonds and
cash.
    Liedtke, who earlier said the company would have a lower
first quarter, also told reporters that the company expected
lower earnings this year.
    "We think earnings will probably be down this year," he
said. Last year the company earned 1.28 dlrs a share from
continuing operations or 68.5 mln dlrs on revenues of 1.9
billion dlrs.
    The earnings figure comes before an extraordinary loss of
56 cts a share or 23.1 mln dlrs.

 Reuter
