Pickens Girds for Showdown With Japanese Company
T. Boone Pickens Jr., an unlikely candidate to champion interests of corporate America, is getting ready for a big showdown in Tokyo on Thursday.
The oilman, best known as a corporate raider, flies to Japan today to attend the annual meeting of Koito Manufacturing Co. He is expected to square off with Koito’s management, which has refused Pickens’ demands for representation as the company’s biggest shareholder.
“We won’t make a formal proposal to be voted upon at this meeting,” Pickens said in an interview. “It is an opportunity to speak for a few minutes. To reaffirm our relationship as a long-term shareholder and our willingness to work with management. The stock isn’t for sale.”
Under Japanese law, a shareholder must own stock for six months before he can make a proposal or call for a special meeting. Pickens plans to speak for 10 minutes at the annual meeting on Thursday at the Shinagawa Prince Hotel and to renew his request for three seats on the board.
Boone & Co. acquired a 20.2% stake in Koito, a producer of automobile headlamps, from a Japanese investor for about $800 million in April.
The Texan’s fight with Koito has taken on a larger political dimension because Pickens’ problems have been well publicized and he has become a vocal critic of Japan’s clubby and closed financial and corporate community.
Rough From the Start
“If the United States and Japan are going to improve their trade situation, and if Japan is going to compete in the global marketplace, Japanese corporations have to change,” he said at a news conference in Washington on Monday. “They can’t stay locked up. We are demanding it, and more and more Japanese investors are demanding it.”
Pickens’ dealing with Koito have been rough from the beginning. The Japanese company initially refused to register the transfer of the Koito shares to Pickens, demanding a Finance Ministry probe as to whether Boone & Co. filed proper documentation. When the ministry refused, Koito’s president agreed to meet with Pickens.
Pickens asked for three board seats, the equivalent to the number held by Toyota Motor Corp., which holds a 19% interest in Koito and buys 50% of the company’s headlamps. Koito management denied Pickens the board seats but gave one seat to Matsushita Electric, which holds only a 5% interest in Koito.
More recently, a Tokyo court refused Pickens’ request that Koito make available certain financial data. “We’ll have to see from here what our legal recourse is. I don’t want to reveal my strategies on that.”
Expects a Profit
Pickens--who may run as a Republican for governor of Texas--has left the Japanese guessing about his motives in the deal, which is widely believed in Japan to be the beginning of the first direct, hostile acquisition of a Japanese company by a foreigner or gaikin.
Pickens said he is expects to ultimately make a profit on his Koito stock. “We have to make a profit first and foremost. With nearly a billion dollars we are not in for altruistic reasons, but it is an opportunity to level the playing field.”
The Japanese press has likened Pickens’ arrival to that of U.S. Commodore Matthew C. Perry, who forced Japan to open its market to foreign trade in 1853.
Boone & Co. acquired the Koito stock from well-known Japanese raider, Kitaro Watanabe, which has also raised the suspicions of Koito’s management. Pickens has earned a reputation as a corporate raider who amassed stock holdings in companies such as Gulf Corp., Phillips Petroleum Co. and Unocal Corp. and made huge profits when he sold the stock.
