T. Boone Pickens Jr., the maverick chairman of Mesa Petroleum Co. who keeps trying to buy a bigger oil company, yesterday disclosed that he and a group of partners have bought 7.9 percent of Unocal Corp., which changed its name last year from Union Oil.
Pickens' pursuit of Phillips Petroleum Co. has kept it in Wall Street's spotlight for the past two months and his previous attempt to take control of Gulf Corp. led to the record $13.2 billion takeover of that company last year.
Confirming rumors that have circulated in financial circles for several days, Pickens said he and his associates have bought 13.8 million shares of Los Angeles-based Unocal and plan to buy more of the nation's 13th-largest oil company.
Pickens insisted that, for now, he has no plans to seek control of Unocal. "We're passive now," he said in an interview from his Amarillo, Tex., headquarters.
"When was T. Boone ever just an investor?" said William Randol, an analyst at First Boston Corp.
"Once again, this is the opening wedge, getting his head under the tent," said Sanford Margoshes, an analyst at Shearson Lehman Brothers. "From his standpoint, I think he'd like to trigger interest from a third party to come in and take over the company."
Unocal had no comment. But earlier this week, Fred L. Hartley, the company's feisty chairman and president, said Unocal "certainly is not for sale."
Pickens' modus operandi in the past has been to buy a large block of a company's stock, and then either to force the target company to buy him out -- a tactic known as "greenmail" -- or wait for another, higher offer. The latter was the outcome of his pursuit of Gulf. A combination of both is currently happening at Phillips, where the company is now fighting off a takeover blitz from investor Carl C. Icahn, who is angered at the recapitalization plan Phillips proposed as a way to end Pickens' pursuit. Pickens has been guaranteed at least $53 by Phillips for each of his shares in that company -- several dollars more than he paid for them.
Pickens has denied repeatedly that he is either a greenmailer or a corporate troublemaker who likes to force unwanted takeovers. He says his only goal is to force up the stock prices of undervalued companies, benefiting all investors -- including himself. Yesterday, he said Unocal "is another situation where we're trying to do the best we can with the capital we have. . . . We thought it was a good investment, so we made it."
Analysts said that Pickens may have trouble working his scheme on Unocal. In addition to Hartley's stated opposition to selling the company, Unocal has a tough set of "shark repellents" -- corporate rules that make an unwanted takeover of the company very difficult.
"Mr. Hartley is an extraordinarily strong, individualistic-type person," Margoshes said. "I think he'll do anything he can to maintain the individual identity of the company."
"They won't pay greenmail and I don't see any white knights," Randol said. " Pickens may have to actually take it over if he goes after this thing."
Pickens has already forced up the price of Unocal shares. His 13.8 million shares of the company cost him a bit more than $42 each; yesterday, Unocal stock closed at $48.50, up 50 cents for the day. The issue was the second most active on the New York Stock Exchange, with 2.1 million shares changing hands. Unocal has been among the most active issues on the NYSE in recent weeks, as rumors swirled that the company was a target.
Pickens said he had about $600 million to spend on Unocal shares, and analysts said that could allow him to raise his stake to about 15 percent. He could buy still more with the proceeds of his Phillips investment. At the company's $53-a-share offer for his group's 8.9 million shares, he will have $472 million more to invest after next week's meeting of Phillips shareholders. But Pickens said yesterday he isn't sure if he'll shift those funds to Unocal stock. "I don't know what we might do after the deal with Phillips is over," he said.
One scenario being bantered around Wall Street yesterday had Unocal and Phillips merging to end their respective problems with Pickens and Icahn. "I think it's a one-third chance that it could happen," Randol said, but Margoshes was more skeptical. "It's not out of the question," he said, "But at this juncture, it's highly unlikely."