Seeks to Force Sale of 13.6% Holding : Unocal Sues Pickens Group Over Stake
Firing another salvo in its battle to fight off an unwanted takeover attempt, Unocal Corp. said late Monday that it has filed suit in Los Angeles seeking to force an investor group led by Texas oilman T. Boone Pickens Jr. to sell the 13.6% stake in Unocal that it has acquired in recent months.
Unocal, parent of Union Oil Co. of California, said the suit alleges that the Pickens group violated federal securities laws in its purchase of the company’s stock.
The suit, filed in U.S. District Court, also seeks to enjoin the Pickens group from voting any Unocal shares it has acquired.
In addition to Pickens and Mesa Petroleum Co., the Amarillo, Tex.-based company he runs, the defendants in Unocal’s lawsuit are longtime Pickens’ allies Cyril Wagner Jr. and Jack E. Brown and six others.
Pickens and other members of his investor group could not be reached for comment Monday evening.
In another development Monday, Unocal said it is boosting its quarterly cash dividend on common stock by 20% to 30 cents from 25 cents, payable May 10 to shareholders of record April 12. The company declined to say whether the boost was an attempt to keep stockholders from selling their shares, saying only that the action “reflects Unocal’s strong financial structure and optimism about future operating results.”
Last Thursday, the Pickens group disclosed in a filing with the Securities and Exchange Commission that it had boosted its stake in Unocal to 13.6% from 9.8%, saying that it may seek to take over the company or force it to restructure. Before then, the group had always insisted that its gradual purchase of Unocal shares was purely an investment.
The oil company has fiercely resisted the Pickens group. In mid-March, Unocal sued its longtime bank, Los Angeles-based Security Pacific National Bank, over loans the institution had made to Pickens. That prompted Security Pacific to back out of the lending group that had extended credit to Pickens.
It also drew a suit by Mesa Petroleum against Unocal, alleging that Unocal was pressuring other banks to end their business relationships with Mesa.
Unocal also has attempted to fight off the Pickens advances by stiffening its corporate bylaws and asking the Federal Reserve Board to curb what it called “abusive use of credit” in funding corporate takeovers.
In announcing the filing of its lawsuit, Unocal noted that in April, 1984, a federal court in Texas had permanently enjoined the Pickens investor group from violating certain federal securities laws.
