It looks as if T. Boone Pickens Jr., the erstwhile hostile takeover king, is back in the game. For 15 years, Pickens all but disappeared. In the 1980s, he shook up Corporate America as he tried to raid Gulf Oil, Diamond Shamrock, and Phillips Petroleum, setting off fierce takeover battles. Now 74, Pickens is limiting his picks to smaller outfits: On June 25, BP Capital Energy partnerships, which Pickens controls, made a bid to buy Penn Virginia, an oil-and-gas explorer, for $329.6 million, or 40 a share. BP already owns 7.6% of Penn, whose stock spurted 15%, to 38.68, on the news. Penn rejected the offer, but the battle is on.
Now the buzz is that Pickens will go after Vintage Petroleum (VPI ), of which BP Energy already owns more than 9%. It paid 14.66 on average for its shares, which now trade at 10. And BP Energy Managing Director Bob Stillwell confirmed that BP is, indeed, considering a bid for Vintage, which he says is undervalued and ripe for a buyout. He declined to discuss the timing or price. Vintage didn't return calls.
Initial interest in Vintage was revealed on May 15 in a 13D filing by BP Energy, in which BP proposed a restructuring of Vintage to pay off its $1 billion debt. Pickens would sell Vintage's entire U.S. assets and part of its Canadian reserves to come up with $800 million. Instead of heeding Pickens, Vintage declared war by dropping--from 15% to 10%--the amount of stock an outsider might own without activating an antitakeover "poison pill." And in mid-June, Vintage said it had sold reserves in Trinidad but was keeping U.S. assets. Vintage earned $2.09 a share in 2001, on sales of $909 million.
By Gene G. Marcial