Pickens, Jacobs, Icahn Reportedly Buying USX Stock : 15.89 Million Shares Traded; Firm May Be Planning Defense
Beleaguered USX Corp.’s stock was besieged by an avalanche of trading on Friday amid reports that at least four well-known corporate raiders are buying up huge stakes in the nation’s largest steelmaker.
USX, formerly U.S. Steel, easily became the most active issue on the New York Stock Exchange as word circulated on Wall Street that celebrated raider T. Boone Pickens Jr. had suddenly joined an impressive list of private investors acquiring large blocks in the energy and steel conglomerate.
In all, 15.89 million shares were traded, closing up $1.75 at $24.625 per share.
Besides Pickens, the investment community now believes that raiders Carl C. Icahn, who acquired Trans World Airlines last year, and Minneapolis-based investor Irwin L. Jacobs have also started buying USX shares.
Icahn has reportedly acquired just under 5% of USX’s 257 million shares to Pickens’ purported 3% stake. It was unclear how much USX stock Jacobs has obtained. Jacobs and Icahn couldn’t be reached for comment, and a spokesman for Pickens refused to comment.
Acquire Up to 15%
Last month, Australian raider Robert Holmes a Court said he would acquire up to 15% of USX, allowed by federal regulations as of Sept. 12. It couldn’t be determined how much he has actually acquired. An attorney in New York for Holmes a Court refused to comment on whether he has accumulated USX shares in the past week.
In the wake of Friday’s hectic activity, officials at the New York Stock Exchange asked USX management to issue a statement concerning the trading, but the company refused. Neither would USX spokesman William Kessler comment. However, USX reportedly is working with its investment bankers on a defensive strategy.
The raiders did not appear to be acting jointly on Friday, although one major brokerage that usually trades on behalf of large investors, Los Angeles-based Jefferies & Co., did handle much of the day’s trading volume. Frank Baxter, Jefferies president, said in an interview just before the market’s close that his firm had traded 9 million USX shares so far during the session after moving 1.6 million shares on Thursday.
Baxter wouldn’t identify his clients, insisting that Jefferies was trading for “many people. There is not just one trader.”
The assault on USX comes as the ailing Pittsburgh-based firm is at its most vulnerable. It now confronts severe crises in both its energy and steel sectors. It is locked in a bitter seven-week labor dispute with the United Steelworkers, which has shut down all of its steel operations in the midst of the worst steel slump since the Great Depression.
Also, its energy operations--accounting for more than half its revenue--have been hurt by the prolonged slump in oil prices.
Industry analysts speculated that the raiders had all come to the same conclusion--that USX’s oil and gas assets were being undervalued by the stock market and that strikebound USX might be too weak to resist strong pressure from outside pursuers.
USX boasts a book value of about $25 per share--and a breakup value of between $30 and $40 per share.
