Waging a war of words over a takeover battle that has yet to begin, Unocal Corp. Chairman Fred L. Hartley on Monday sharply criticized Texas oilman T. Boone Pickens, Security Pacific National Bank and others for participating in a "merger mania" that leaves behind "ruined lives, corporate cadavers and poorer prospects for reserve replacement and future economic development for the nation."
"I am deeply concerned about the growing wave of irresponsible and unethical behavior by some of our leading financial institutions," Hartley told a meeting of the Natural Gas Processors Assn. A Unocal spokesman said more than 1,000 people attended the industry group's meeting.
"Some banks and financiers are participating in deals that threaten the economic well-being of this country," Hartley said, according to a copy of his speech distributed by Unocal. "Under the guise of 'protecting the small shareholders,' corporate raiders and their bankers and brokers are engaging in stock and bond and credit schemes reminiscent of those of the 1920s--but on a multibillion-dollar scale."
Last week, Unocal sued Security Pacific, the Los Angeles-based oil company's banker for more than 40 years, alleging deceit, misrepresentation and breaches of contract and fiduciary duty for lending money to members of an investor group led by Pickens, chairman of Amarillo, Tex.-based Mesa Petroleum.
The group, Mesa Partners II, has bought 9.7% of Unocal's stock, which Pickens has said is for investment purposes only.
"I believe that if you can't trust your banker, who can you trust?" Hartley said. "We feel Security Pacific betrayed us, misused our confidential data and is playing both sides of the game."
A Security Pacific spokesman said the bank "won't dignify these attacks except to say that the lawsuit is without merit and we will defend against it vigorously and successfully."
In its suit against Security Pacific, Unocal characterized the Mesa purchase as a "hostile takeover." In his speech, Hartley said he is "wary" of Mesa Partners' intentions.
"The Mesa groups in the past have seemed more interested in short-term run-ups than longer-term resource development," Hartley said. "The Cities Service, Gulf and Phillips cases (in which Mesa was involved) bear this out."
David Batchelder, financial vice president of Mesa Petroleum, replied that "that kind of statement clearly isn't supported by our past actions."
In the Phillips transaction, for example, the Mesa group received $53 a share while other shareholders received more, Batchelder said. "In Gulf, everyone got $80 (a share), and Mesa was the last shareholder out of Gulf.
"If a company is doing well in the short term it is doing well in the long term," he said.