Pickens Group Again Raises Its Stake in Unocal : Now Holds 9.7% of Stock, SEC Filing Discloses
For the second time this week, a group led by Texas oilman T. Boone Pickens has raised its stake in Los Angeles-based Unocal Corp., parent of Union Oil Co. of California.
In a filing Friday with the Securities and Exchange Commission, Pickens and his partners disclosed that they now hold 16,854,400 Unocal shares, a 9.7% stake. On Tuesday, the oilman known for his attempts to acquire oil companies disclosed that he had raised his stake to 8.5% from 7.9%.
The Pickens group, Mesa Partners II, has said it might raise its ownership share to as much as 15% and has characterized its holdings as strictly an investment. The filing indicated no change in the partners’ motive.
Setting the Stage
As it has since Pickens first disclosed his ownership in Unocal, the stock market shrugged off the latest Pickens disclosure. Unocal stock closed at $46.625, down 12.5 cents, in moderate trading Friday on the New York Stock Exchange, indicating investors’ skepticism over Pickens’ ability to trigger a bidding war for Unocal.
Nevertheless, securities analysts and investors who are Pickens and Unocal watchers predicted that Pickens is merely setting the stage for a run at Unocal, which has become one of the two hottest oil-company properties in the country.
(The other, Phillips Petroleum Co., headed off an attack by Pickens last year by developing a controversial plan under which Pickens’ Mesa Partners would receive $53 a share for its Phillips stock. That plan has run into considerable shareholder opposition, however.)
Merger Talk Rumors
“It is clear that in the not-too-distant future, Pickens will make some sort of offer” for Unocal, predicted Herb Hart, an oil analyst with S. G. Warburg, Rowe & Pitman, Akroyd in San Francisco.
“And knowing (Unocal Chairman) Fred Hartley a little, I think he will be prepared to avoid the Boone Pickens problem” by seeking a “white knight” from what he called the “big boys’ club” to acquire the company in a friendly takeover.
Hart, who has followed California oil companies for years, said Chicago-based Standard Oil Co. (Indiana), Cleveland-based Standard Oil Co. (Ohio) and Royal Dutch Shell, the European oil giant, all would fit that description. All have been rumored in recent weeks to be engaged in merger talks with Unocal.
Unocal spokesman Barry Lane said the company had no comment on either the latest Pickens filing or the white-knight rumors. Hartley, as he has since the initial disclosure of the Pickens stake, declined to comment Friday.
Known as a strong-willed and fiercely independent executive, Hartley is considered unlikely to take any radical anti-takeover steps until there is an offer on the table.
“I just can’t see Hartley sabotaging his company to get rid of Pickens,” Hart said.
Some mergers-and-acquisitions specialists believe that Pickens will be particularly hard to shake off. “I’m convinced this is the company Boone really wants, which is why he’s handling this one a big more delicately,” said one corporate takeover specialist who asked to remain unidentified. “You’ll notice he hasn’t just charged in on this one and thrown the gauntlet.”
Pickens, in a telephone interview from Amarillo, Tex., said he couldn’t comment directly on those statements. To do so, he pointed out, could be construed as “changing our position on what we intend to do with the stock” from its stated intention to hold the stock strictly as an investment.
