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Financier-Oilman Plans to End Two-Year Struggle With Japanese Company

April 29, 1991

AUSTIN, Texas (AP) _ Financier T. Boone Pickens said Monday he plans to sell his 26.4 percent stake Koito Manufacturing Co., ending a two-year attempt to join the Japanese auto parts maker’s board.

″We’ve given up on ever getting on the board of Koito,″ said the Texas oilman, who helped pioneer hostile takeover tactics in the United States.

In an opinion page article for The Washington Post, Pickens said he would sell his 42.4 million shares to Japanese stock speculator Kitaro Watanabe, who sold him the shares in 1989.

The terms of the agreement had not been reached, Pickens said Monday during an appearance at the Texas Capitol.

″We haven’t concluded any transaction or anything else, but we’re going to sometime here in the next few days or certainly weeks or so,″ he said. Koito has contended that Watanabe actually controlled Pickens’ shares and was trying to engage in ″greenmail,″ which is an attempt to have Koito buy back shares at above-market prices to avoid a takeover.

Pickens said he had a genuine interest in Koito and was entitled to board representation as the company’s largest stockholder.

As he campaigned for two years to join Koito’s 20-seat board, Pickens sought to make his fight a political cause.

He took his battle to Capitol Hill many times, the latest on Wednesday, when he told the House subcommittee on commerce and competitiveness that his problems illustrated the closed doors many Americans hit when they try to do business with the Japanese.

Sunday’s article for the Post was the first indication he would sell the stake. In the article, Pickens blamed ″keiretsu,″ the Japanese name for anti-competitive collusion among companies, which he said is gaining ground in the United States.

Pickens has complained that Koito, Toyota Motors’ auto lighting supplier, allows Toyota to control it.

″As good as it is, Japan’s industry is not necessarily smarter, more agile and more efficient than ours - it is simply based on business practices that America spurned almost a century ago when we outlawed trusts, monopolies and cartels,″ Pickens wrote.

When Pickens bought the Koito stock with money lent by Watanabe, the purchase amount was estimated at $1.01 billion. In recent weeks, Koito’s stock price has made Pickens’ stake worth about $844 million.

Pickens said he doesn’t think he’ll lose money on the sale, but hopes to break even.

A Japanese newspaper, Asahi Shimbun, said a week ago that Watanabe’s Azabu Building Co. was in need of funds, apparently because of a slump in the real estate business in Japan, and was recalling the loan.

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