Pickens Group Hikes Stake in Unocal to 8.5%

An investor group led by Texas oilman T. Boone Pickens disclosed Tuesday that it has raised its stake in Los Angeles-based Unocal Corp. to 8.5% from 7.9%, and Minneapolis financier Irwin L. Jacobs confirmed that he has acquired a “substantial” number of Unocal shares.

Meanwhile, in a cautious letter to Unocal shareholders, Chairman Fred L. Hartley said the company’s record of long-term growth would not benefit by a financial restructuring such as that suggested by the Pickens group. Unocal is the parent of Union Oil Co. of California. David Batchelder, vice president for finance of Pickens’ Mesa Petroleum Co. in Amarillo, Tex., said the Mesa Partners II investor group filed amended documents late Tuesday with the Securities and Exchange Commission in Washington indicating that it had raised its stake to 8.5%.

Last Thursday, the group had disclosed that it bought 7.9% of Unocal and might raise its ownership share to 15%.

Pickens has built a reputation for attempting to acquire oil companies, but he said his partnership bought the Unocal stock for investment purposes only.

In a telephone interview, Jacobs would not say how many Unocal shares he has purchased except to say that the number was “substantial.” Jacobs is an investor without any experience in the oil business, and analysts believe that he bought the stock in hopes of making a profit should Unocal be acquired by another firm.

Jacobs also would not say if he soon intends to file papers with the SEC, which is required once an investor has accumulated 5% or more of a company’s stock.

Unocal’s shares have traded heavily in recent weeks as speculation rose that it may be a takeover candidate.

But the price of Unocal stock fell Tuesday by 62.5 cents a share in trading on the New York Stock Exchange, closing at $45.625. The stock price also fell last Friday, indicating that investors are skeptical that Pickens, Jacobs or anyone else will be able to instigate the sort of bidding stampede for Unocal that has led to the takeover of other oil companies in recent years.

In his letter to stockholders, Hartley offered no clues about whether Unocal will take any defensive actions to prevent the Pickens-led partnership from acquiring more of the firm’s stock. Hartley again declined requests for an interview to discuss his company’s future.

“We agree that our shares are a good investment, just as they have been in past years,” Hartley said. “Our long-term shareholders have been well served by Unocal’s growth record. . . . We remain confident that those shareholders who continue to invest for the long term will be well served by Unocal’s future growth in the natural resource industry.”