EnGulfing

Oilman Pickens rides again

Next to racquetball, playing poker and flying in his Learjet, there are few pastimes that Texas Oilman T. Boone Pickens Jr., 55, enjoys more than swooping down on vulnerable companies and giving their managers the willies. During the past 16 months, Pickens has earned $105.7 million for his company, Mesa Petroleum, by buying up large amounts of undervalued stocks and selling them at a handsome profit, sometimes back to the company whose stock he bought. Early this year, for example, he bought a large stake in Superior Oil, then in September sold it back to Superior for a $31.8 million profit.

Now Pickens is at it again. This time his target is Gulf Oil, the nation's fifth largest oil company (1982 sales: $30.6 billion). Pickens announced last week that he and a group of investors had bought $630 million worth of Gulf stock, or 14.5 million shares. He said they had put together a $1.1 billion nest egg to buy all the Gulf stock they could get their hands on.

"Very simply," said Pickens, "we're buying the stock for investment purposes.

Gulf stock is selling at a huge discount when compared to appraised value." So it is. Some analysts believe Gulf is worth as much as $114 a share; it closed last week just under $47. In papers filed with the Securities and Exchange Commission, the Pickens group indicated some changes they might like to make at Gulf to build the stock's value. Among them: selling oil and gas holdings to shareholders in the form of a royalty trust. This device, first used in 1979 at Mesa, would have the effect of avoiding double taxation (first as corporate profits, then as shareholder dividends).

Gulf was taking Pickens' maneuverings seriously. It reportedly set up a $4 billion credit line to defend its stock, possibly by buying it back. And the company called a special shareholders' meeting for Dec. 2 to consider, among other items, the way directors are elected.

The idea, presumably, would be to make it harder for Pickens to win a seat on the Gulf board.

Pickens disclaimed any interest in winning such a seat: "I'm already on too many boards." He accused the company of attempting to shut off Mesa's credit by threatening to withdraw its business from banks where Mesa borrows money.

Analysts believe, though, that Pickens will wind up selling his stock back to Gulf at a profit, and that all the fuss will serve mainly to stir up Gulf's corporate waters.

Terry H. Smith, a New Orleans oil analyst, suggests that this is as it should be.

Pickens performs a service, Smith says, just by "shaking up companies and making them less complacent." This file is automatically generated by a robot program, so viewer discretion is required.