For the past two weeks, Wall Street has had its own version of a soap opera: the Cities Service-Mesa Petroleum takeover fight.
This billion-dollar battle pits a much smaller but more aggressive company, Mesa Petroleum, based in Amarillo, Texas, against Cities Service Corporation, the nation's 18th-largest oil company, based in Tulsa, Okla. For the past two years Mesa has been eyeing Cities Service for a takeover. The result has been that each company is now trying to swallow up the other.
This financial soap also matches T. Boone Pickens Jr., Mesa's colorful chairman, against an imaginative group of investment bankers. The bankers are led by First Boston Corporation and Lehman Brothers Kuhn Loeb Inc., which are running the Cities Service defense.
The result has been a spectacle that Wall Street analysts say has entertained them as well as enriched them. Nearly every day Mesa and Cities Service have been among the most active stock issues. One securities analyst, wishing to remain anonymous, compares the fight to a high-stakes poker game: Neither company is averse to bluffing, and it could be that the ante will be raised again.
The odds of something further happening, in fact, were increased on Friday, June 11, when Cities Service announced it had obtained only 45 percent of Mesa's stock. According to Rosario Ilacqua, an analyst with L. F. Rothschild, Unterberg , Towbin, the fact that Cities Service failed to get the 37 million shares (51 percent) of Mesa stock it was tendering for may hurt Cities Service defense efforts.
Mr. Ilacqua expects Mesa to get up to 80 percent of Cities Service stock by its cutoff date, June 16. He comments: ''This will be a textbook case of how a well-run small company can use outside investors to gain control of a larger company that is not well regarded. The business schools will be analyzing this for years.''
So far this is what the individual offers look like: