Australian investor Robert Holmes a Court`s investment company intends to acquire as much as 15 percent of USX Corp., the nation`s largest steelmaker and owner of Marathon Oil Co.
The USX announcement Tuesday sent its stock surging in extremely heavy trading on the New York Stock Exchange.
In a brief statement, USX, formerly United States Steel Corp., disclosed receiving a letter announcing that Bell Resources Ltd. intends to buy $15 million or more, ”but not more than 15 percent,” of USX`s 258 million common shares outstanding.
There was initial confusion because USX said the letter had been sent by Weeks Petroleum (USA) Ltd., which identified itself as ”a person included within Bell Resources Ltd.”
But Bell Resources is the investment company of Holmes a Court, who has launched a number of hostile takeover attempts worldwide.
A Fortune magazine profile last year of Holmes a Court, one of Australia`s wealthiest men, said he will buy ”into any kind of company he thinks is undervalued.”
The 49-year-old South African-born lawyer has gained attention in recent years after making repeated, and so far unsuccessful, attempts to acquire Broken Hill Proprietary Co. Ltd., Australia`s largest company.
Some analysts doubt that Holmes a Court would succeed in buying USX, which is even larger. But Charles Bradford, a steel analyst for Merrill Lynch in New York, takes the threat seriously.
”Clearly, he can buy 15 percent of USX if he wants to,” said Bradford, who put the cost of such a stake at about $730 million, before USX stock rose even further in price.
Acquiring the entire company would cost $4.5 billion or more.
Bradford said Holmes a Court could be attracted to USX in part because of its overfunded pension plan, which he said has ”close to $10 a share in it.” He could also reduce debt incurred in a USX acquisition by selling some of the company`s numerous assets, Bradford said.
Holmes a Court is said to have doubled his personal wealth in the last year, to an estimated $366 million, to become one of Australia`s two richest men, according to the country`s leading business magazine.
He is still stalking Broken Hill Proprietary after four unsuccessful takeover attempts, the latest in May. He has built up a stake of about 28 percent, the largest in BHP, a steel, mining and oil concern.
Last year, Holmes a Court bought a large stake in Asarco Inc., a New York-based mining and smelting company. He threatened to buy as much as half of the company, but he sold his holdings after Asarco adopted an effective
”poison pill” defense.
USX`s stock has been languishing because of near-depressions in its major markets, steel, oil and gas.
Robert Decker, a steel analyst for Duff & Phelps Inc. in Chicago, said there have been rumors circulating since earlier this year that USX was a
”potential target” for takeover, principally because of the drop in its stock price.
For the first half of 1986, a $398 million writedown of oil inventory values caused USX to post a loss of $235 million.
The company has been hit by a strike by the United Steelworkers union since Aug. 1.
USX declined to elaborate on Bell Resources` intentions beyond its two-sentence announcement. ”I`m not at liberty to comment further on what the company thinks about it or what it will or will not do,” a spokesman said.
