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Few in the industry thought a small operation like Mesa could win control of a giant like Hugoton. But Pickens succeeded in outmaneuvering the company's directors. During the Hugoton transaction, Pickens began developing what would later become his signature takeover approach.
He griped about the stodgy, bureaucratic directors running the company. They were, he wrote in his book, "men who knew very little about the oil business." One director in particular, Pickens wrote with little charity, was "overweight, red-faced and very arrogant."
Pickens acquired some 17 percent of the company's stock, then turned a key board member into an ally and won control of the company. Since then, the Hugoton field has generated more than $1 billion in revenues for Mesa and made it one of the largest natural-gas producers in the United States. "The Hugoton acquisition is the most important deal we ever made," Pickens wrote in his 1987 book. He could not know that Hugoton would also one day push Mesa to near-bankruptcy and cost Pickens control of his company.
In the mid-1980s, Pickens plunged into the takeover business with a passion, and his targets made Hugoton look like tiddlywinks.
Between 1982 and 1987, Pickens made takeover bids for Cities Services, Gulf Oil, Phillips Petroleum and UNOCAL. Each of the companies ultimately eluded Pickens' grasp by selling out to somebody else. Gulf, for instance, merged with Chevron in a $13.2 billion deal.
Pickens also made runs on companies outside the oil industry. His list of unsuccessful targets included aerospace kingpin Boeing and Newmont Mining, a gold-mining company. The October 1987 stock market crash sent him out of the country to bid for a Japanese auto-parts company. Overseas, as at home, Pickens made a lot of noise, but never acquired control of any assets of the companies he targeted.
But he did make a lot of money.
Pickens, Mesa and its executives earned handsome returns for their efforts. Stock they purchased as part of the takeover attempts would invariably rise in value when the targets were acquired by a white knight. Even if they never acquired a company, the raiders could reap the bounty of the pumped-up stock prices. In the Gulf deal alone, for instance, Mesa earned a pretax profit of $518 million.
The high-stakes dealing also won Pickens something else -- an international reputation as a savvy and relentless businessman.
An Oklahoma native with a Western twang and a country-boy appreciation of the graphic metaphor, Pickens became a poster boy for the 1980s crew of corporate raiders, appearing on the covers of Fortune and Time.
Pickens wallowed in the attention, seizing the opportunity to sound off about shareholders' rights and the excesses of larger companies' CEOs. He landed a $1.3 million advance for his autobiography. He even explored politics, paying pollsters to determine his name recognition and dancing close to a bid for the Texas governor's mansion.
As his star rose, Pickens was able to assemble around him a cast of bright, eager and ambitious young men. They moved to Amarillo, of all places, to be at the epicenter of one of the hottest takeover games in the country. They stood to make millions and learn from the legendary Pickens himself.
The magazine Financial World dubbed the group "Boone's Boys."
A photograph included in Pickens' autobiography shows a pack of serious-looking young men, all wearing white shirts and ties, hunched over a table cluttered with documents. They are Boone's Boys, the team of talented opportunists who worked feverishly for Pickens in the mid-1980s, helping plot and execute his headline-grabbing takeover bids. The photo includes Andrew Craig and Sidney Tassin, who have since left Mesa.
Largely indistinguishable from the pack is David Batchelder. But during those heady times, Batchelder was never very far from Pickens -- literally, figuratively or in the financial press.
On the surface, Batchelder was just another of Boone's Boys, and that appellation fit the chummy, schoolyard character of the relationship between Pickens and the young men attracted to Mesa by his forceful personality and high profile. Pickens took "the boys" hunting and played racquetball against them. He invited the bachelors to holiday dinners at his house. At work, Pickens wanted his boys within shouting distance.
Batchelder recalls spending hours at a time just sitting in Pickens' office, serving as a sounding board and listening to his boss' conversations with other captains of industry. "You wouldn't have believed some of the people I met," Batchelder said in a recent interview, still conveying the awe he felt at meeting the likes of Armand Hammer. "[Pickens] didn't care how old and how inexperienced you were," Batchelder recalled. "If he could have you in that meeting, he would have you in that meeting."
Pickens prized his youthful executives, precisely because of their youth. "They had ideas, initiative and a lot of energy," he wrote in his book. "In most corporations, people like Batchelder and Tassin are considered too young; they are seen as a threat to their superiors. Over the years, however, organizations lose their aggressiveness when they can't hold their best young people."
At the time, Pickens communicated his appreciation for Batchelder and the others. "One of the beauties of Boone in those early days was that he was a good listener," Batchelder says.
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