T Boone Pickens: Texas oil tycoon who epitomised the corporate raider
T Boone Pickens was a shrewd, publicity-savvy Texas oil tycoon who helped usher in the era of hostile takeovers in the 1980s, and later became an influential voice on environmentally sound energy policy.
Pickens, who has died aged 91, was one of a handful of fearsome, high-stakes corporate raiders who helped to 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 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. Fortune magazine dubbed Pickens “the most hated man in corporate America” during that era, while he presented himself as a drawling David battling petroleum Goliaths.
Pickens’ bold forays into the stock market and his visibility on magazine covers and on TV made him one of the few businessmen in the 1980s who were instantly recognisable 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. He disputed his reputation as a “raider”, describing himself as an activist who “changed the value” of companies led by hapless executives.
A prosperous, take-a-chance oilman in his twenties, he spent much of his career as president and board chair 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, Pickens launched three of the most daring takeover bids in US corporate history, for Gulf, Phillips Petroleum and Unocal. In the process, he became at the time one of the highest-paid executives in the country, with $20m in salary and deferred compensation.
Read more
Ferdinand Piech: Executive who made VW Europe’s biggest carmaker
The triple bid had far-reaching consequences – for the oil industry and for Pickens. His example of prospecting via merger led to the acquisition of three majors by other majors: Texaco by Chevron, Mobil Oil by Exxon and Standard Oil of Ohio by British Petroleum.
Thomas Boone Pickens Jr was born in Holdenville, Oklahoma, a town of 3,000 surrounded by oil wells, in 1928. His father was a lawyer for Phillips Petroleum who bet his family’s modest wealth on oil-lease deals but whose efforts never amounted to a big payoff. He was also a gambler who often played poker until dawn.
Pickens developed an early taste for deals when he started delivering newspapers, initially to 28 addresses. He expanded his operation by taking over other boys’ routes until he was delivering 155 papers. The young Pickens worked summers as a Texaco refinery roughneck and a fireman and boiler maintainer for a railroad company, graduating from Oklahoma State University with a degree in petroleum geology in 1951.
That year he started out as a well-site geologist for Phillips. Frustrated by the stodgy corporate culture, he quit in 1955 with $1,500 in the bank and a growing family to support to set out as a wildcatter. With two partners, he started Amarillo-based Petroleum Exploration. In 1964, he took the company public under the name Mesa Petroleum and soon realised that as much money could be had in exploration, even more could potentially be found in acquisition.
In 1989 he moved Mesa headquarters to Dallas after becoming involved in local political squabbles. Over the next several years, he amassed $1bn in debt through lavish payouts to Mesa shareholders, losses that he compounded with a bad bet that natural gas prices would rise. In 1996, as he suffered from long-simmering but undiagnosed depression, he was forced by insiders to yield control.
Read more
David Koch: Industrialist who influenced US conservative politics
He started a new investment company, BP Capital, which operated hedge funds devoted primarily to oil and gas futures. The funds swallowed tens of millions of dollars in their first years before rebounding by hundreds of millions in 2000, an achievement that coincided with the end of Pickens’s depression after he sought treatment.
Pickens was an early exponent of the peak oil theory, which held that the world would soon run out of oil to pump. The rise of fracking, which made hard-to-reach oil accessible, upended the theory. He advocated an energy policy that he said would wean the US from its dependence on foreign oil – and that would also benefit companies in which Pickens had a financial stake. He called natural gas produced in North America a “patriotic” fuel source and promoted his plan by appearing in TV commercials. Environmentalists said in response that the conversion costs to natural gas for the nation’s car fleet would be prohibitively high.
Pickens – who titled his 2008 memoir The First Billion Is the Hardest – was a major donor to the Republican Party and especially close to the Bush political dynasty. His philanthropy was substantial – he reportedly donated $7m to aid Hurricane Katrina victims and bequeathed $500m to Oklahoma State, which named the football stadium after him.
He was married and divorced five times. He is survived by four children and a stepdaughter.
T Boone Pickens, oil tycoon, born 22 May 1928, died 11 September 2019
© Washington Post
Read more
Read more Ferdinand Piech: Executive who made VW Europe’s biggest carmaker
