NEW YORK, JULY 14 -- Indicating that he intends to hold a stake in beleaguered Texaco Inc. for a substantial period of time, Australian financier Robert Holmes a Court today asked federal regulators for permission to raise his ownership of the country's third-largest oil company above 10 percent.
Holmes a Court's request, which is required under federal antitrust law, fueled speculation that the Australian eventually will mount a takeover effort against Texaco or that his increasing investment will prompt a major restructuring of the company.
Texaco filed for protection under the federal bankruptcy laws last April, citing a deteriorating credit picture caused by its $10.3 billion legal battle with Pennzoil Co. Houston-based Pennzoil was awarded a record judgment in 1985 when a jury found Texaco guilty of interfering with a merger contract between Pennzoil and Getty Oil Co.
Holmes a Court began buying Texaco shares through a company he controls soon after the White Plains, N.Y.-based oil giant announced its bankruptcy filing. The Australian financier has said in filings with the Securities and Exchange Commission that he is holding the stock for investment purposes only.
Today's request sets off a 30-day antitrust clearing procedure during which Holmes a Court may not acquire any more Texaco shares. If Holmes a Court requests it, however, and if federal authorities see no antitrust problems, that prohibition may be lifted before the 30 days are up.
Today's request is significant in part because it means that Holmes a Court must retain any shares purchased above the 10 percent threshold for at least six months, or else return any profits he might make from the sale of those shares to Texaco. That restriction stems from a securities law provision governing the activities of so-called "corporate insiders."
People familiar with the operations of Texaco's and Holmes a Court said today it is unlikely federal regulators will object on antitrust grounds to the Australian increasing his investment. In Australia, Holmes a Court controls a 30 percent stake in Broken Hill Proprietary Co. Ltd., the nation's largest company, which has diverse interests in mining and natural resources.
Texaco said it was notified by Holmes a Court today that he "has a present good faith intention to acquire 10 percent or more of the outstanding common stock of Texaco Inc."
A spokesman for Pennzoil reiterated statements that the company has had no contact with Holmes a Court or his representatives. The spokesman declined further comment. At the time of Texaco's bankruptcy filing, Pennzoil strategists said they might use the bankruptcy proceedings in an attempt to gain control of the oil giant.
Attorneys representing Holmes a Court in the United States did not return phone calls.
Speculation about Texaco's eventual fate by analysts and lawyers involved in the proceedings centers not only on Holmes a Court's intentions, but also on Texaco's prospects in its appeal of the Pennzoil judgment and on the complex, relatively untested laws governing the takeover of a company that has filed for bankruptcy protection.
Texaco has appealed the Pennzoil verdict to the Texas Supreme Court and is waiting to hear whether the state' high court will review the case.
If Holmes a Court or someone else were to mount a hostile takeover effort against Texaco while the case was pending, the outcome would be nearly impossible to predict, bankruptcy experts said. "The normal rights under corporate law may collide with the bankruptcy law," said Murray Drabkin, a New York bankruptcy lawyer.
Usually, a takeover target that has filed for bankruptcy protection "is dying for cash," Drabkin said. Texaco's operations, however, are prosperous except for Pennzoil's outstanding legal judgment.
Special correspondent Marianne Yen contributed to this report.