63 Million Shares to Go

After 13 years of courtroom hassling, the epic legal battle between the U.S. Government and the Du Pont Co. seemingly reached an end last week. In a 26-page final decree, Chicago's Federal Judge Walter J. La Buy ordered Du Pont to divest itself within three years of the $3.5 billion worth of General Motors stock that, according to Justice Department trustbusters, has given Du Pont undue influence over the auto company. To prevent possible resurgence of Du Pont influence over G.M. in a new form, La Buy also extended the divestiture order to two other groups: 1) 124 senior members of the Du Pont family and Du Pont family trusts; 2) Christiana Securities Co., a holding company that owns 29% of Du Pont's outstanding stock and which, in turn, is itself 80% owned by members of the Du Pont family.

La Buy's ruling did not limit Du Pont to any specific method of divestment, but it gave the company new ground rules within which to work. Disposal of the 63 million G.M. shares that Du Pont owns outright must begin no later than Aug. 1; the shares may be distributed to Du Pont stockholders or disposed of in any other way the company sees fit. Thereafter, Christiana Securities must unload the 535,500 G.M. shares that it now holds, plus the 18.5 million shares that it stands to receive if Du Pont should decide simply to divvy up its G.M. holdings amongst its shareholders.

For Du Pont, bolstered last month by the unexpected passage of a bill that will ease the tax problems created by the divestiture, Judge La Buy's ruling was probably the best that could be hoped for. The Department of Justice is probably less satisfied. Instead of accepting the Government's proposal that all members of what it calls "the Du Pont family group" be required to sell any G.M. shares that they might receive under the Du Pont Co. or Christiana divestment programs, La Buy ruled that many younger Du Ponts "having only the casual contacts normal to third and fourth cousins" should not come under the order.

La Buy, who twice before has made rulings favorable to Du Pont, accomplished the Government's main objective. When divestiture has been completed, Du Pont ownership of G.M. will be cut from 23% to 1.85%. The next question was what would happen to the prices of Du Pont and G.M. stock once the great unloading began. The outlook: because both companies have such strong sales and earnings records, Wall Street does not expect either stock to fall far, but G.M. stock is likely to dip a few points during periods when large blocks of Du Pont's old holdings flood the market.

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