A Week on the Wild Side

The failure of the Gulf-Cities Service merger sends Wall Street into a spin

Aftershocks from a collapsed merger. Surprise bankruptcies. Gyrating stock prices. A startling new takeover bid late on Friday. Even to the most seasoned Wall Street veterans, last week was wild.

At the close of business on the previous Friday, Aug. 6, Gulf Oil Corp. had dropped a short-fused bomb on the stock market. Citing antitrust objections by the Federal Trade Commission, Gulf abruptly pulled out of an agreement to acquire Tulsa-based Cities Service Co., the 19th largest U.S. oil firm, for $5 billion, or $63 per share. When trading opened...

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