FTC Clears Icahn to Raise Stake in USX Above 25%

Corporate raider Carl C. Icahn has received Federal Trade Commission appproval to boost his ownership of USX Corp. to more than 25% from 11.4%, the steel company said Monday. The move comes as prospects for the industry and USX have brightened.

Icahn, who purchased his stake a year ago while making an unsuccessful $8-billion takeover bid for the steel, oil and natural resources firm, has a reputation for having an eye for undervalued companies.

USX’s stock price jumped 50 cents to $31 Monday following the FTC approval. But industry analysts said the possibility of improved earnings and cash flow at USX also helped push its stock price higher.

“There’s no question the fundamentals (are improved),” said John Parry of McLeod Young Weir, a New York brokerage. “The well-being of steel is much improved, and the stock market is reflecting that.”

Other analysts said the chance of an expanded role by Icahn could also boost investor interest in the steel company, which weathered a lengthy strike last year and only recently returned to profitability.

“I think it could be riding on Carl Icahn’s coattails,” said Mary Anne Sudal of Fitch Investors Service in New York. “And the chance of a dividend increase.”

John Frankola of Parker/Hunter Inc., a Pittsburgh brokerage, attributed the jump to public remarks by USX chairman David M. Roderick last week in New York regarding the company’s increased earnings potential.

Roderick said earnings in the fourth quarter and next year will continue to improve, and at a faster rate than earlier this year. He said the improvements would come because of stable oil prices, better steel demand and higher prices and lower interest and labor costs.

One of USX’s major subsidiaries is Marathon Oil.

The company returned to profitability in the second quarter after losing money in seven of the previous eight quarters. It took a $1.5-billion charge in last year’s fourth quarter as part of a massive restructuring for plant closures and the layoffs of thousands of workers.

USX earned $140 million in the third quarter, compared to a year-ago loss of $183 million, on revenue of $3.9 billion.

Some analysts have speculated that there could be a future combination of Texaco and Marathon Oil.