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St. Joe Minerals Corp., which has been fiercely trying...

NEW YORK -- St. Joe Minerals Corp., which has been fiercely trying to defend against a hostile takeover attempt by Joseph E. Seagram and Sons Inc., said Tuesday it had reached a merger agreement with Fluor Corp. of Los Angeles, a giant construction and engineering firm.

St. Joe and Fluor said jointly that Fluor would buy 45 percent of St. Joe's outstanding stock for $60 a share and then would issue 1.2 shares of Fluor common for each of the remaining shares. St. Joe has about 46 million shares outstanding or optioned.

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The two companies said they believed the merger would be tax free and that Fluor would commence its cash offer no later than April 6. Thereafter, special meetings of stockholders of both companies would be called to approve the deal.

Seagram said it was evaluating the announcement and would have no further comment until more details, including any conditions that may be attached to the agreement, become available.

St. Joe had intended to buy up about $1 billion worth of its own stock at $60 a share to thwart the March 11 offer by Seagram -- the U.S. subsidiary of the Canadian liquor concern -- to buy St. Joe at $45 a share or about $2.07 billion. St. Joe termed this offer 'grossly inadequate' and its management threatened to liquidate the company rather than be acquired by Seagram.

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In a series of defense maneuvers announced last week, St. Joe also said it was actively pursuing other merger or acquisition partners.

Over the weekend, Sulpetro, Ltd. of Calgary, said it had agreed to buy CanDel Oil Ltd. from St. Joe for about $546 million (Canadian). St. Joe's 92 percent-ownership of CanDel had been regarded in Wall Street as an obstacle to reaching a merger agreement with another non-Canadian firm to thwart the Seagram offer.

Last Wednesday, U.S. District Court Judge Milton Pollack granted Seagram a temporary restraining order forbidding St. Joe from going ahead with the plan to buy back its own stock or other proposals, including the threat of liquidation, aimed at thwarting Seagram's bid.

Judge Pollack expressed outrage at St. Joe's management's threat to liquidate, saying 'It is inconceivable that an alleged flourishing enterprise has authorized its board to subject the assets and charter of the company to a scorched earth policy to be accomplished in the name of exercise of business judgment.'

But Judge Pollack conceded that his order did not of itself forbid the St. Joe management to seek another merger partner. Thus, the Fluor proposal apparently does not violate Judge pollack's order.

St. Joe and Fluor said their directors will hold seperate meetings on Sunday to approve the proposal and that it already has been submitted to the federal court in New York.

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Chairman John C. Duncan of St. Joe said the company looks forward to being owned by Fluor 'with keen anticipation and confidence' and that 'the transaction affords St. Joe shareholders the opportunity for participation in St. Joe's future.'

A hearing is scheduled Wednesday before Judge Pollack to determine if the temporary restraining order he granted the Seagram subsidiary should be turned into a preliminary injunction.

Last week, the SEC suspended all trading in St. Joe shares through April 3 in order to permit stockholders to evaluate the competing tender offers by St. Joe and Seagram. At its last trading, St. Joe common sold at $52.50, surging $6.50 on the company's proposal to buy back its own shares at $60.

St. Joe is in lead, zinc, copper, gold and oil and gas. It has annual sales of around $1.2 billion and 11,500 workers.

Fluor is a global engineering combine with annual sales of about $3.5 billion.

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