Pickens Boosting Stake in Japanese Auto Parts Firm

Texas takeover specialist T. Boone Pickens Jr. said Wednesday that he is increasing his stake in Koito Manufacturing Co. to 26% and asking the Japanese auto parts supplier to raise its interim dividend.

Pickens told a news conference that his Boone Co., already Koito’s largest shareholder, is buying another 10 million shares but “has no plans” to take over the company that has repeatedly denied him a seat on its board.

“But we do want to participate in the management of Koito and share in its long-term success,” said Pickens, adding that he had “no interest in accepting ‘greenmail’ from Koito.”

A takeover target can ward off a suitor by offering greenmail--buying back at a higher price shares acquired by a potential raider.

Pickens said he expects to request a special Koito shareholders meeting in early October.

A Japanese news agency reported later that Koito planned to call a special shareholders meeting Nov. 11 to discuss Pickens’ requests.

A Pickens spokesman, Mark Helmke, said Boone Co. had not been contacted by Koito but added: “We are concerned that before an agenda is set by Koito, we will demand that a number of our points be included on the agenda.”

The stock purchase does not involve Pickens’ Mesa Petroleum Co. or the shareholders’ rights group he heads, the United Shareholders Assn.

Pickens said the additional shares were being purchased privately from Azabu Group, a large car dealer and real estate concern in Japan.

Pickens said the stock purchase would give his Dallas-based, private investment merchant bank a total of 42.4 million shares, or 26% of Koito. He acquired 20.2% of Koito’s shares in March.

Toyota Motors, Koito’s second-largest shareholder, is also the auto headlight distributor’s leading customer.

Noting that Toyota has three representatives on the Koito board, Pickens said he and Boone Co. have been “denied our rights because we are Americans. Koito and its so-called stable shareholders, like Toyota, don’t want us to see how their cozy relationship works.

“Not only do they want to keep out Americans from participating in Japan’s economy, but they also don’t want the Japanese public to see how their closed corporate structure benefits a few elites to the detriment of the public.”

Pickens also called on Koito’s board to increase the rate of the interim dividend from 4 yen per share, or about 2.7 cents, to 7 yen, or nearly 5 cents per share.