Simmons Adds to Holdings in Lockheed : Tells SEC His 9.46% Stake Is for Investment Only
Dallas investor Harold C. Simmons disclosed Tuesday that he has again increased his stake in Lockheed Corp.--to 9.46% from 8.03%.
The additional purchases, bringing Simmons’ holdings to about 6 million common shares, renewed questions about the intent of his investment in the Calabasas-based aerospace giant.
In a Securities and Exchange Commission filing Tuesday, Simmons referred to previous statements that he is buying the stock for long-term investment purposes although he may change his mind and seek control.
“I take him at his word that he is an investor,” said Wolfgang H. Demisch, an analyst with UBS Securities in New York. Simmons’ intentions may become clearer if he acquires substantially more stock, Demisch added.
But some analysts say Simmons, who has raised and lowered his Lockheed stake in the past year, realizes that his chances of taking over Lockheed are slim and speculate that he may be attempting to force the company to seek a friendly buyout by someone else. If that happens, Simmons’ investment could dramatically increase in value, said Paul H. Nisbet, an analyst with Prudential-Bache Research in New York.
However, Nisbet added, “I don’t think he can do that without a much larger stake.” Moreover, the analyst said, there is little reason for Lockheed’s management to feel pressured to take any action because of Simmons.
“I think they recognize that they’ve got a lot of power behind them in the U.S. government,” Nisbet said. Because Lockheed is a prime defense contractor, he explained, the Pentagon has an interest in seeing that the company’s operations are not disrupted and would exert extreme pressure against a hostile takeover.
A Lockheed spokesman said Tuesday that the company had no comment on the Simmons filing. Simmons could not be reached.
Meanwhile, Simmons’ purchases of Lockheed shares has had the effect of keeping their price up, according to analysts. In composite trading Tuesday on the New York Stock Exchange, Lockheed stock closed at $48.125, up 12.5 cents. Simmons, through two companies he controls--NL Chemicals and NL Industries--bought 909,100 Lockheed shares between July 18 and July 31 for $47.50 to $49 each, for a total of about $43.9 million.
Valhi Corp., Simmons’ major investment vehicle, controls 3.4 million shares--5.49%--of Lockheed, according to the latest SEC filing. Valhi also controls NL Industries, which holds 2.04%, and NL Chemicals, which controls 1.93% of the aerospace firm.
