Tycoon who led corporate raids, including on Gulf Oil in Pittsburgh
T. Boone Pickens, a shrewd, publicity-savvy Texas oil tycoon who helped usher in the era of hostile takeovers and corporate “greenmail” in the 1980s, and who later became an influential voice on environmentally sound energy policy, died Wednesday at his home in Dallas. He was 91.
His death was announced by his spokesman Jay Rosser, who did not give a precise cause. Mr. Pickens had been ailing since a series of minor strokes in 2016.
Mr. Pickens — a distant relative of frontiersman Daniel Boone — was one of a handful of fearsome, highstakes corporate raiders who helped define the Reagan-era boardroom scene and who set a raucous tone at shareholder meetings. He targeted companies he considered undervalued — mostly oil firms, including Pittsburgh-based Gulf Oil — and bought conspicuous chunks of stock in the expectation that management, to keep control of the business, would pay a premium to buy it back.
Critics called this stratagem “greenmail” and condemned it for ignoring the interests of employees, customers and management. Fortune magazine dubbed Mr. Pickens “the most hated man in corporate America” during that era, while he presented himself as a drawling David battling petroleum Goliaths.
Mr. Pickens’ bold forays into the stock market and his visibility on magazine covers and on TV made him one of the few business people in the 1980s who were instantly recognizable to the average American. He was a ubiquitous presence in the media, which could not get enough of his folksy takedowns of corporate chieftains as greedy ignoramuses. Entrenched executives, he said, “who themselves own few shares of their companies, have no more feeling for the average stockholder than they do for baboons in Africa.”
In Pittsburgh, Mr. Pickens’ name is synonymous with the decline of Gulf Oil. He began buying up shares of the Pittsburgh company in 1982, when it was the fifthlargest U.S. oil company with 40,000 employees, putting Gulf’s leadership on the offensive for over a year.
In a letter to shareholders in 1984, Gulf’s Chairman James Lee and President Edward Walker III called Mr. Pickens an “opportunist” who either wanted to take over the company and “sell the pieces for a quick gain” or see it bought at a high price by someone else, which would allow Mr. Pickens to cash out his shares at a premium.
In the end, the latter scenario came true.
To shake off a hostile takeover from Mr. Pickens, Gulf sought a white knight in California-based Standard Oil Co., which later became Chevron. The merger, a $13.3 billion deal, spelled the end of the Pittsburgh institution but was a windfall for Gulf’s shareholders and for Mr. Pickens.
Mr. Pickens disputed his reputation as a “raider,” describing himself as an activist who “changed the value” of companies led by hapless executives.
“When we started buying stock in Gulf Oil, it was $33,” he once told Playboy. “It had been $33 for 10 years. When we sold our shares back, it was $80 a share. At $40, the market cap was $6 billion. At $80, it was $13 billion.” (Mr. Pickens’ company made a profit of $760 million.)
A prosperous wildcatter in his 20s, he spent much of his career as president and board chairman of Mesa Petroleum, which he expanded into a regional behemoth through acquisitions before tasting the potential for even bigger revenue streams by forcing companies to pay him to go away.
From 1983 through 1985, Mr. Pickens launched three of the most daring takeover bids in U.S. corporate history, for Gulf, Phillips Petroleum and Unocal.
Although they deployed poison pills, resorted to the courts for help and got employees to demonstrate in favor of management, Phillips Petroleum and Unocal also ended up paying off Mesa.
Mr. Pickens soon landed on the cover of Time and became known as a spokesman for shareholders, many of them pensioners and retirees, who showered the oilman with fan mail.
The groundswell of popular support led Mr. Pickens to found the United Stockholders Association in 1986. Although short-lived, the lobbying group persuaded the Securities and Exchange Commission to drop restrictions on communication between investors and companies making hostile bids and to allow outside directors to meet without managers present.