Boone Pickens Takes on Tokyo
NEW YORK (AP) _ T. Boone Pickens Jr., veteran of notorious but unsuccessful takeover attempts in the United States, says there’s nothing hostile about his investment in a Japanese auto-parts maker.
″Basically, I’m trying to make money,″ the Texas oilman says.
But as far as Koito Manufacturing Co. is concerned, this ″nottoriya″ - takeover monger - has taken his corporate raiding operations overseas.
It is hard to tell who is right. But Pickens’ latest venture into corporate confrontation may actually be part of a larger agenda, one in which he’s taking on the entire Japanese way of doing business.
Pickens and Koito management will face each other Thursday as Koito convenes its annual meeting in Tokyo. They’ve been bickering in the press since early April, when Pickens’ privately held Boone Co. became Koito’s biggest shareholder by purchasing 20.2 percent of the manufacturer’s stock.
Pickens’ major gripe so far has been Koito’s refusal to give Boone Co. two seats on the company’s board although the manufacturer’s second-largest shareholder, Toyota Motor Corp. - which is seen as the real power behind Koito - has placed three directors there.
Koito management already has said it won’t address that issue at the meeting. But Pickens expects a showdown with Koito anyhow, because he wants to bring four people to the meeting, and management has told him he can send just one representative and an interpreter.
Sidney Tassin, a partner in Boone Co., says Pickens may be temporarily hamstrung by Japanese law, which restricts shareholder rights until a company’s stock has been held by an owner for six months.
Tassin indicated in an interview that when the six months are up - and Boone Co. has rights including the ability to call special meetings and to see some of Koito’s financial information - Pickens may be able to move more freely.
″That may prove to be the first little test,″ Tassin said of the dispute over Boone Co.’s representatives at the meeting.
Pickens is taking on - and irritating - Koito’s management in a way that harkens back to his past challenges to U.S. companies, including Phillips Petroleum Co., Unocal Corp. and Gulf Corp.
The fact that Boone Co. acquired its stake from a well-known Japanese raider, Kitaro Watanabe, has only served to heighten the suspicion of Koito managers. In late April, the company demanded Pickens prove that he - and not Watanabe - was the true owner of the stake.
Koito evidently believes Pickens bought the shares hoping to drive up their price and force Koito to buy them back at a premium above the market rate - a practice known as greenmail.
Pickens denied in an interview that he’s ever been a corporate raider, and said he isn’t one now. He said he won’t try to take over Koito because it wouldn’t be feasible for him to try to operate a company in Japan.
″There’s nothing hostile about the Koito deal; we just made an investment,″ he said.
But his record is what makes Koito wary.
Pickens, through his Mesa Limited Partnership - and its predecessor, Mesa Petroleum Co. - made millions of dollars from unsuccessful attempts on U.S. companies. Some of his critics argued that Pickens only went after Phillips, Gulf and other companies to profit from his stock holdings, which the firms usually bought back from Mesa.
His association with Watanabe, who tried unsuccessfully last year to force Koito to buy back his stake at a premium, also cast doubt on Pickens’ motives.
Some observers in the Japanese press speculated Pickens might have an agreement to sell back his shares to Watanabe so that both the Japanese businessman and Boone Co. would profit.
In his fight with Koito, Pickens - who is considering running for governor of Texas - is continuing a campaign waged through takeover battles and the advocacy group he founded, United Shareholders Association: a campaign to enforce what he calls shareholder rights and make management accountable.
But on a larger scale, Pickens said, he’s trying to force the Japanese to open their markets, which many foreigners complain are now virtually closed to American investors.
″It’s extremely difficult to get a large participation or interest in a Japanese company,″ he said, explaining that Koito was the only company in which he could obtain a large stake.
″They can’t just play a one-way street - that’s just not the way life is,″ Pickens said. ″They’re going to be forced to open up or they’re going to be forced to pull out.″
Pickens said he can’t stop American investors and companies from selling their assets to the Japanese. But he said support is growing among Americans and in Washington for legislation that would force the Japanese to relax their attitudes on foreign investment.
″We may play a small part in this overall situation,″ he said.