Icahn Sells 17.3% Texaco Stake; Bid for USX Rumored
Investor Carl C. Icahn on Thursday unloaded his 17.3% stake in Texaco at a $630-million profit, prompting speculation that he was amassing resources for a run at steel and oil giant USX Corp.
The chairman of Trans World Airlines tried to take over Texaco last year but failed. He owns 11.4% of USX.
Icahn, who is one of Wall Street’s most active raiders, said he sold his 42 million Texaco shares at $49 each to three New York brokerage houses Thursday. He is also to receive a dividend of $4 a share.
The $2.06-billion sale was the largest dollar transaction ever on the New York Stock Exchange and the second-largest block of shares traded, the exchange said.
The largest transaction, in terms of shares, occurred in 1986, when 48.8 million Navistar International Corp. shares changed hands after that firm’s recapitalization.
Icahn bought the Texaco stock at an average price of $38, so he should make a profit of about $15 a share, or $630 million, industry analysts said.
“He certainly could make a run at buying more of USX,” said Bruce Lazier of Prescott, Ball & Turben Inc.
Amid the speculation, the USX share price jumped by $2.75 and closed at $37.375 on the Pacific Stock Exchange. The New York Stock Exchange had halted trading in USX earlier, and it did not resume. USX would not comment on the stock’s rise.
Lazier said USX may be worth as much as $50 a share because the Pittsburgh-based company could sell its natural gas reserves for about $2.5 billion and spin off or sell its USS steel unit, the nation’s largest steel manufacturer.
“There’s long been talk that Icahn wants to get in in a bigger way (at USX),” another analyst said.
Texaco Stock Falls
Texaco shares fell $2.125, to $49, after Icahn dumped his stock on Thursday. The buyers, Shearson Lehman Hutton, Salomon Inc. and Goldman, Sachs & Co., plan to offer them at $49 each.
Icahn confirmed that he had sold the stock. “We think (Texaco) is a lot better off than it was a year ago,” he said. “The management is doing a better job. We like to think we had a small part in it.”
Texaco sold $7 billion of assets last year, largely at Icahn’s prodding, and then agreed to pay shareholders $2.4 billion through higher dividends and a share-buyback plan.
