Seahawk Oil Launches Hostile Takeover Bid for Houston Firm

Times are tough in the oil business, make no mistake. But while other companies are busy shrinking their operations in the face of a continuing oil glut and falling prices, Seahawk Oil International Inc. in Newport Beach has another idea--buy customers.

The company, along with its president and founder Robert S. Friedenberg, Tuesday launched a hostile takeover bid for Oxoco Inc., a struggling Houston oil company that has lost more than $100 million in the last 15 months.

Friedenberg said that if his bid is successful, among the first moves would be to contract with Seahawk Oil Management Co., a newly formed subsidiary of Seahawk Oil, for professional management services for Oxoco. Friedenberg said the contract would be the first for the management company Seahawk formed late last year.

Friedenberg said the partnership he is forming with Seahawk is prepared to pay 10 cents a share for up to 2.2 million shares of Oxoco, a move that would give the partnership a 25% stake in the company at a total cost of $220,000. As the largest single shareholder, Friedenberg said that the partnership would oust Oxoco’s present management and “restructure and look after whatever value might” remain in Oxoco.

Oxoco Corporate Secretary Vida Como said that the company had yet to be formally notified of Seahawk’s plans. However, based on news accounts, Como said that a board of directors meeting is being arranged and that until that meeting, the company would not comment on the takeover proposal.

Friedenberg, who said he has not talked to Oxoco management because “there’s nothing to say in a hostile takeover,” contended that the deal makes sense for both sides.

“We’re making an awfully sweet deal for the Oxoco shareholder who has something now that’s essentially worthless,” he explained of the 10-cent-per-share offer.

In return, Seahawk would receive a management contract that could pay far in excess of the $220,000 that the company is shelling out for its position in Oxoco.

Friedenberg’s takeover bid is not his first encounter with Oxoco. He founded the company in 1969 in Philadelphia. Five years later, he moved the company’s headquarters to Newport Beach to take advantage of the coastal climate.

But when Oxoco moved to Houston in 1979 to be closer to the heart of the nation’s oil industry, Friedenberg left and founded Seahawk. A year later, he took Seahawk public with a sale of 1.5 million shares of stock at $1 each. In 1982 he sold an additional $2 million worth of stock.