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T Boone Pickens, oilman who made billions as a much-feared corporate raider – obituary
T Boone Pickens, who has died aged 91, was a cantankerous American oilman and “corporate raider”.
Pickens was an early and successful exponent of “greenmailing” – buying a block of shares in a target company, launching a bid in order to drive its share price upwards, then selling the stake back to the company at a profitable premium to enable the company to avert a takeover or pass into the ownership of a preferred “white knight”.
His most celebrated exercise of this technique was his assault in 1983 on Gulf Oil – fifth largest in the league of US oil companies, in which Pickens’s own master company, Mesa Petroleum, ranked 92nd at the time.
Having acquired a first stake in Gulf at less than $40 per share and launched a bid at $55, Pickens provoked a winning rival bid from Standard Oil of California at $80 and reaped profits for himself and his associates of $750 million. Similar raids on Phillips and Unocal followed, and by 1985 Pickens was featuring on the cover of Time magazine and reckoned to be the highest-paid executive in America.
Though the label “corporate raider” stuck to him throughout his later career, Pickens preferred to be seen as an activist investor whose interventions benefited millions of smaller shareholders as well as himself. He defended greenmailing on the grounds that it boosted the target companies’ market value while gingering up the performance of executives who “have no more feeling for the average stockholder than they do for baboons in Africa”.
If the corporate establishment thought him a pirate, other market players admired him for his wit as much as his boldness in deal-making. One fellow raider, Carl Icahn, called him “a stand-up guy of the old school”.
Distantly related to the 18th century frontiersman Daniel Boone, Thomas Boone Pickens Jr was born on May 22 1928 at Holdenville, Oklahoma, a cattle town surrounded by oil wells. His father, Thomas, was a lawyer for Phillips Petroleum who gambled on oil-lease speculations; his mother, Grace, was a more level-headed personality who managed Holdenville’s petrol rationing during the Second World War.
“I was very fortunate in my gene mix,” her son remarked, while also crediting his father for teaching him that “a fool with a plan can outsmart a genius without one every time.”
In T Boone’s teenage years the family moved to Amarillo, Texas, where he was a high school basketball star. He went on to study Geology at Oklahoma State University before joining Phillips Petroleum as a well-site geologist.
But big corporate life was too dull for the young Pickens: he turned to wildcatting, and in 1955, with $2,500 of capital and a $100,000 line of credit, launched his first company, Petroleum Exploration. Based in Amarillo and focused on the “upstream” activities of exploration and drilling, it was renamed Mesa Petroleum in 1964 and expanded by a series of acquisitions of companies (some larger than itself) over the following decade.
Not everything went Pickens’s way – he was forced to sell off Mesa’s cattle interests in 1974 at a large loss – but having declared that “it has become cheaper to look for oil on the floor of the New York Stock Exchange than in the ground”, he garnished his reputation as a ruthless market tactician.
A failed bid for Cities Service Co, an Oklahoma oil company, brought a $30 million profit in 1982, and another, for General American Oil, yielded $44 million. The Gulf episode which followed made him a celebrity of 1980s corporate America.
The fortunes of Mesa declined in the 1990s, and when Pickens was eventually ousted from the boardroom he turned his attention to the creation of an energy-based hedge fund, BP Capital, which in due course redoubled his fortune.
In his prime Pickens looked younger than his years, keeping fit by playing tennis and golf; he was also an enthusiastic quail-hunter. But relaxation was rare: he worked a 12-hour day, demanded a similar commitment from his staff and derided the “toys” and “perks” indulged in by other senior executives.
In 2008 he published The First Billion is the Hardest, which was also a platform for the “Pickens Plan” – a campaign to reduce US dependence on imported Opec oil which brought him some 3.5 million followers on social media. One practical aspect of that plan was a scheme to build the world’s largest wind farm in the Texas Panhandle region, but in 2011 he scrapped the project, and his last years in business were focused on the buying and selling of natural-gas assets, in which his instincts remained as sharp as ever.
Having been ranked as a billionaire for many years, Pickens dropped out of the Forbes 400 list of wealthiest Americans in 2013, but tweeted: “Don’t worry, at $950 million I’m doing fine.” He had by then set on a new course as a philanthropist: his donations, chiefly to medical and educational causes, included $500 million to his alma mater, Oklahoma State University, for science and athletics. Giving money away was “not as fun as making it,” he observed, “but it comes a close second.”
He made occasional sallies into the political arena, not least as a contributor to George W Bush’s campaigns for the Texas governorship and the presidency. Pickens also offered $1 million in support of the “Swift Boat veterans” who contested Senator John Kerry’s Vietnam military record during the 2004 presidential election campaign. Some years later, however, Pickens endorsed Kerry’s proposals on limiting climate change.
Pickens owned a vast Texas cattle ranch with its own airport, another in Oklahoma, and mansions in Dallas and Palm Springs. Five times married and divorced, he is survived by the four children he had with his first wife, Lynn O’Brien, and by an adopted daughter of his second marriage, to Beatrice Carr Stuart.
His subsequent wives were Nelda Cain, Madeleine Paulson (widow of the founder of the Gulfstream private jet company) and finally Toni Chapman Brinker, whom he divorced in 2017.
T Boone Pickens, born May 22 1928, died September 11 2019