Advertisement

Turning Away From Texaco, Icahn Says He’ll Focus on Building TWA

From Reuters

Investor Carl C. Icahn, after agreeing to end his pursuit of Texaco Inc., says he will focus on Trans World Airlines, possibly building up his airline through acquisitions.

“I’ve got an airline to run,” Icahn said in a telephone interview from his suburban New York home. “We may enlarge it.”

Icahn took over TWA in early 1986, winning concessions from the airlines’ unions when TWA brought in Texas Air Corp. Chairman Frank Lorenzo to make a competing bid.

Over the weekend Texaco announced a $1.9-billion special dividend and $500-million stock buyback plan. In return, Icahn agreed to stop buying up Texaco shares. He owns 16.6% of Texaco, the nation’s third-largest oil company.

Advertisement

“We made peace,” Icahn said.

Icahn stands to reap more than $336 million from the dividend alone on his shares.

Asked if he would add to the airline by acquisitions, Icahn said, “That’s the best way to enlarge it.” He declined to elaborate. Icahn last fall held unsuccessful discussions about buying Texas Air Corp.'s Eastern Airlines.

The truce with Texaco is the second Icahn has reached in little over two years with a major American industrial concern. Icahn called off his attack on USX Corp. after it restructured to escape his takeover threat.

Advertisement

Icahn’s battle with Texaco has been long and antagonistic. Last year, he proposed a more than $11-billion takeover of the company and waged a failed battle to seize control of its board.

Embattled Texaco since then has reached agreements to sell $7 billion in assets, including the stake it holds in Texaco Canada for $3.24 billion.


Advertisement
Advertisement