Tracinda Withdraws Its Offer: Waiting To Sell Tesoro

As stated on Monday, [Tracinda Says Rights Plan Threatens Tender] my Tesoro (TSO) buy was based mostly on this Tracinda offer (along with hopes of crude dropping, so margins for the industry would go up). Well as quickly as it came, the offer has now been pulled away. Bugger!

• Tracinda Corp., the investment arm of billionaire Kirk Kerkorian, on Tuesday withdrew its tender offer for oil refiner Tesoro Corp., expressing concern over the company's recent adoption of a "poison pill" stockholder rights plan.
• Tracinda made a cash tender offer of $64 per share on Nov. 7 for up to 21.9 million shares, or about 16 percent of Tesoro's outstanding stock. That offer was scheduled to expire on Dec. 6.
• A Tesoro statement said it was "surprised" by Tracinda's decision. The San Antonio-based company added that the stockholder rights plan "is in the interest of all stockholders because it reduces the likelihood that a potential acquirer could gain control of Tesoro by open market accumulation or other coercive takeover tactics without paying a premium to every stockholder."

So the stock is in freefall; luckily I sold just over half Monday at $55. Unfortunately I still hold the rest and the stock was down within 24 hours to $48.50. That's 12% lower. Thus far, the 10% of funde I allocate to special situations like this have not fared well. Bah and humbug. At this point I will wait for a rebound to roughly low $50s and get out as this is not a favorite of mine. As I stated my refiner of choice is Frontier Oil (FTO). Ironically the other smaller refiners are all imploding with Tesoro - Western Refining (WNR), Holly Corp (HOC) - even big dog Valero (VLO) is down over 4% - but Frontier Oil is actually up. Hence, the reason I like it so much.

Long Tesoro and Frontier Oil in fund; no personal position