Word: mobilization
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Such tactics have made Pickens the scourge of the oil patch. Shareholders of Mobil (1984 sales: $54.6 billion), which has been rumored for months to be a ( Pickens target, last week approved a variety of so-called shark repellents designed to ward off corporate raiders. Among the measures was a provision requiring that an unwanted merger be approved by an 80% vote...
Pickens claims that inept management can be found everywhere among the large oil firms. He zestfully points out that petroleum companies made four of the seven acquisitions that FORTUNE magazine rated last year as the worst of the past decade (examples: Mobil's $1.86 billion purchase of Marcor, the owner of Montgomery Ward; Standard Oil of Ohio's $1.77 billion acquisition of Kennecott). Many firms are now unloading some of their unattractive operations. Exxon is trying to sell its office-products business, and Atlantic Richfield recently took a $785 million write-off on its stake in Anaconda...
...while Pickens is saying little about his plans, Wall Street is buzzing with speculation. Among the most frequently named takeover targets are Mobil, the third largest U.S. energy company, Texaco, the fourth biggest, Sun, which ranks ninth, and Unocal, the twelfth...
...mere talk of a takeover bid from Pickens can drive up a stock's price. Last month shares of Mobil jumped 1 5/8 points in a day on rumors that Pickens was interested in the company. The stock of Sun and Unocal also rose on takeover talk. Moreover, when Pickens went after such firms as Cities Service and Gulf, shareholders saw the value of their holdings increase sharply. Gulf stock jumped from $40 to $80 a share in a seven-month period...
...press also doubted that Mobil's boycott would work. Said Sheldon Zalaznick, managing editor of Forbes: "This is corporate governance by tantrum. They will not get what they want, which is a better-behaved Wall Street Journal." Zalaznick thinks Mobil will eventually realize that and reopen the door. When it does, Schmertz will doubtless have plenty to say. -By Janice Castro. Reported by Barry Kalb/New York