HUGHES TOOL &lt;HT> SAYS BAKER &lt;BKO> MERGER ALIVE

  Hughes Tool Co Chairman W.A. Kistler
  said its counter proposal to merge with Baker International
  Corp was still under consideration and that a merger was in the
  best interests of both companies.
      "Our hope is that we can come to a mutual agreement that is
  good for both companies," Kistler said of the proposed merger
  that would result in a 1.2 billion dlr oil field service
  company. "We're working very hard on this merger."
      Hughes' board today again adjourned a shareholders meeting
  to vote on the proposed merger and rescheduled it for March 11
  to give Baker more time to consider the counter proposal.
      The Hughes board, which had previously expressed concern
  about a U.S. Department of Justice consent decree that would
  require Baker to sell its drilling bit operations and
  submersible pump business, met yesterday and threatened to
  terminate the proposed merger.
      The Hughes board made a counter proposal that the two
  companies first find acceptable buyers for the businesses
  before signing the decree.
      The directors of Baker immediately after receiving the
  counter proposal filed a law suit in Texas in a Texas state
  court to force to Hughes to complete the merger.
      "The uncertainty as to the price and conditions that might
  be imposed by the Department of Justice makes us very nervous
  about what the outcome might be," Kistler said, in explaining
  why Hughes had made the counter proposal.
      "We need additional time to understand why Baker did not
  accept our proposal."
      Kistler also said that the law suit filed by Baker "was not
  a factor" in the board's decision to keep its merger proposal
  on the table.
      He declined to comment on the allegations in the lawsuit.
      Kistler said Hughes would be willing to consider a
  compromise counter proposal, but declined to be more specific.
      The Justice Department in January said it would block the
  Hughes and Baker merger on anti-trust grounds unless both
  companies agreed to sign a consent decree that would provide
  for the sale of the assets after the merger took place.
      The Hughes board said it would not sign the decree because
  its was too "unreasonable." Hughes said that Baker should
  instead complete the sale of the disputed assets before the
  merger is finalized and given government approval.
      Under the decree, if Baker is unable to find acceptable
  buyers within a specified period of time after the decree is
  approved, a federal trustee would become responsible for
  finding a buyer.
      Kistler said that under those terms, the trustee could take
  up to 10 years to complete the sales.
      He also expressed concern that the combined companies might
  be required by the government's conditions to license some of
  its technology to any purchaser of the assets.
      Baker said last night in a statement that the required
  assets to be sold would reduce revenues by about 65 mln dlrs,
  representing about three pct of the revenues of the combined
  companies.
  

