Icahn Boosts Stake in Texaco, Says He May Wage a Proxy Fight for Control

Carl C. Icahn, Texaco’s largest shareholder, disclosed Thursday that he has increased his Texaco holdings and is considering forming a partnership to acquire still more of the oil company’s stock.

Icahn, in a filing with the Securities & Exchange Commission, also said he is considering a proxy fight at Texaco’s annual meeting in April.

Sources at Texaco and Pennzoil said they don’t regard Icahn’s latest moves as a threat to their $3-billion settlement plan and Texaco’s plan to emerge from bankruptcy proceedings. Rather, the sources said, Icahn appears to have shifted his focus from fighting Texaco’s reorganization plan to fighting for shareholder rights at Texaco’s annual meeting.

Icahn, who was instrumental in forging the settlement agreement between Texaco and Pennzoil, last week lost a bid to offer Texaco shareholders an alternative reorganization plan. In ruling against Icahn, U.S. Bankruptcy Court Judge Howard Schwartzberg said the annual meeting is a more appropriate forum for Icahn’s complaints than is a bankruptcy reorganization plan.

In its official response to Thursday’s development, Texaco again called on Ichan to support the company’s own reorganization plan.

“I think he’s just alerting everyone that he plans to make noises down the road,” said a Pennzoil source. “I really don’t think he’s trying to cause trouble for the settlement.”

In his SEC filing, Icahn said he has increased his share to 14.8% from 14.5% and is “considering forming a slate of nominees for election of directors” at the annual meeting.