PITTSBURGH — USX Chairman David M. Roderick met Wednesday with investor Carl C. Icahn, who has an 11.4% stake in the giant steel and oil company, in the latest of a series of sessions the two have held concerning Icahn's $8-billion proposal to acquire USX.
In comments made here before he left for the latest session in New York, Roderick characterized the discussions as "still friendly."
Even so, USX has prepared itself for a fight. USX's cash reserve now stands at $2.6 billion, he noted, and it has begun to provide "golden parachutes" that would provide handsome severance benefits for some executives in the event of takeover.
He said discussions with Icahn were aimed at "trying to put meat on the bones of the Icahn proposal." Icahn has not made any concrete suggestions on how USX might pursue its stated goals of restructuring, he said, and "a tremendous amount of detail . . . has to be worked out" before the company agrees to open its books to the New York businessman as he has requested.
USX officials and Icahn were unavailable for comment after Wednesday's meeting.
Icahn has been by far the most persistent of several corporate raiders who began accumulating USX shares in August. The others appear to have sold their stakes. The first, Australian businessman Robert Holmes a Court, told Roderick about two weeks ago that he has sold his entire USX stake at a profit.
Holmes a Court, according to Roderick, owned about $15 million of USX stock at the end of August, when he filed a disclosure statement with the federal government and bought more stock and stock options thereafter.
Roderick made his remarks at his regular quarterly press conference, a two-year-old custom generally keyed to the release of USX's quarterly results. USX announced Tuesday that it suffered a loss in the third quarter ended Sept. 30 of $183 million, compared to a net profit of $144 million in the same period a year earlier.
More to Talk About
This time, Roderick acknowledged that he had much more to talk about than the numbers. Besides the Icahn buyout proposal, USX is also grappling with a three-month-old strike by the United Steelworkers. The strike contributed to a third-quarter drop of about 45% in steel sales to $930 million from $1.7 billion a year ago.
Roderick took the occasion Wednesday to warn the union that delaying a strike settlement for another 10 or 12 days would wipe out the steelmaker's prospects to obtain steel orders for the first quarter of 1987 and so would long delay the strikers' return to work. Those orders are generally placed by the first week of November.
"If we miss the window of opportunity," he said, "there won't be much business in the first quarter, regardless of when we settle. Many employees might not be back to work until April or May."
He said that was one reason that the company and union returned to negotiations on Oct. 21. The talks reopened, he said, after he and United Steelworkers President Lynn Williams had a face-to-face talk in which "Mr. Icahn's name also came up."
Discussed Cash Reserve
Roderick also discussed the cash reserve that USX has available. As disclosed on Tuesday, USX has increased its cash hoard to $2.6 billion from $347 million at the beginning of the year, largely by drawing down its bank credit lines and by selling assets. Industry observers presume the money is being reserved for defensive maneuvers should any be necessary. Roderick on Wednesday said it was accumulated "for just general purposes for the best interests of the shareholders." He added that the company also expected to have received $1 billion from the sale of assets by the end of this year, double its original goal of $500 million.
USX has also begun installing golden parachutes for about 20 top executives, including himself, he said. These are incentive plans and severance packages triggered by any significant change in corporate control such as a takeover, and are aimed in part at encouraging key managers to resist overtures from other companies. The plans are "modest--no bonanzas," he said.
Roderick also said that USX expects to receive restructuring proposals from its investment bankers within a week. USX stock closed in Wednesday's composite trading on the New York Stock Exchange at $25.50 a share, down 75 cents.