Corporate takeover artist T. Boone Pickens Jr. met Tuesday and Wednesday with management of his latest target, Los Angeles-based Unocal, to discuss a possible settlement of their takeover battle.
At the request of Unocal, Pickens met in Los Angeles with unidentified members of the oil company's management to talk about a "possible basis upon which an agreement between the parties could be reached," Pickens' Mesa Partners II investor group said in a statement released Wednesday.
Pickens, in an interview, said he couldn't discuss exactly what the two sides talked about during the meetings.
However, part of the discussion was believed to have centered on a possible recapitalization plan like the one undertaken by Phillips Petroleum to drive away Pickens and financier Carl C. Icahn.
Pickens at a recent meeting in New York said he would not sell his Unocal shares back to the company at a premium. But he didn't rule out abandoning his Unocal offer if the company proposed a restructuring program or some other plan that would increase the value of its stock.
Confirmed by Unocal
Pickens said the meetings lasted for five to six hours on Tuesday and about 30 minutes on Wednesday. Sources close to the discussions said Mesa broke off the talks, which Unocal Chairman Fred L. Hartley attended.
Pickens said no agreement was reached and no arrangements for future meetings were made.
A Unocal spokesman confirmed that discussions occurred but had no further comment. The spokesman declined to say who represented Unocal at the meetings.
David Batchelder, financial vice president of Mesa Petroleum, which owns 90% of Mesa Partners II, was also involved in the discussions. Pickens is chairman of Amarillo, Tex.-based Mesa Petroleum.
Mesa Partners is trying to buy slightly more than 50% of Unocal's stock for $54 per share. Unocal has tried to stymie the offer with one of its own to buy 50 million Unocal shares for senior secured notes worth $72 per share; Unocal has said it will buy another 37.2 million shares if the Mesa group's tender offer is successful.
Pickens said he was first approached about possible discussions Monday morning, before Unocal's annual shareholder meeting, and again in the afternoon following the meeting.
Didn't Know Outcome
Thus, Unocal approached the Pickens group before it knew the outcome of the key shareholder vote, before it was aware that it had lost that day an important round in Delaware state court and before Hartley stated that Unocal might be willing to buy the Mesa group's 23.7 million Unocal shares at market price.
At a press conference after the Monday annual meeting, Hartley said: "If Mr. Pickens wanted to sell his shares back to us at market price--I said market price--there might be reasons for us to buy them." Pickens said the same day that he wouldn't accept such an offer.
At the annual meeting, Unocal asked shareholders to reelect a slate of three directors, including Hartley. The Pickens group urged shareholders to adjourn the annual meeting until June 28 to give shareholders more time to consider the offers by Unocal and Mesa Partners for their shares.
The results of the vote will not be disclosed by Unocal until May 20.