Jaws: The Australian

By Janice Castro

When Robert Holmes a Court comes calling, most corporate chiefs hide the company silver. A sly and extraordinarily patient Australian financier, Holmes a Court has built Bell Group, a $2 billion corporate empire that reaches from oil and gas interests near Tasmania to theaters in London's West End, by capturing troubled companies one at a time. Now the raider is circling around Texaco, and no one is entirely certain of his intentions.

Holmes a Court, 49, made an initial move three months ago, after Texaco was forced into bankruptcy proceedings by its debilitating legal battle with Pennzoil. He announced that he had paid $541 million for 6.4% of Texaco's 242 million outstanding shares "exclusively for purposes of investment." Wall Street experts have wondered ever since whether he might have more than a passive holding in mind. That speculation grew last week as Holmes a Court, who now holds 9.6% of Texaco's shares, said he is seeking U.S. Government approval to increase his stake to as much as 15% of the stock of the third largest U.S. oil company (1986 revenues: $32.6 billion). That could give him important input into corporate decision making at the beleaguered oil firm.

Born in South Africa, the son of a prosperous British rancher, Holmes a Court (the family name dates from the Norman Conquest in 1066) studied law in Perth, in western Australia, and decided to settle there. But the young attorney hit his stride once he got into investing. Often underestimated by his opponents, the lanky Holmes a Court has since 1970 won control of transportation, entertainment, publishing, mining and petroleum concerns around the world. Today, with a net worth of some $250 million, he is reputedly Australia's wealthiest citizen. A reclusive investor, Holmes a Court prefers being at home with his wife Janet and four teenage children to hanging out at an executive watering hole. To relax, he plays chess against a computer. He owns an extensive collection of mostly Australian art and a stable of some 200 Thoroughbred racehorses.

Holmes a Court's accumulation of Texaco's stock may be nothing more than a shrewd gamble on the firm's long-term health and its ability to reach a settlement with Pennzoil. Looking at the company's substantial oil and gas reserves and other holdings, most financial analysts think that Texaco's shares are severely undervalued at last week's closing price of 45 1/8. In the past, Holmes a Court has ended raids on target firms when the price was right. Last August, for example, he said he was seeking a 15% stake in USX. Then, as takeover speculation drove up the price of the stock, he reportedly turned a handsome profit on a block of his shares. Still, Texaco may look tempting to Holmes a Court, who has said he wants to establish a sizable U.S. industrial base. Texaco officials welcomed his vote of confidence in the value of their company's shares but said they would fight any attempt to take over the firm.

Holmes a Court will not be easily intimidated. He has said he is energized "by doing what I'm doing as well as I can." He may have learned that lesson in a high school physics class back in Natal, South Africa. During a visit to his old school in 1985, he sought out his former physics teacher. Though Holmes a Court had been first in his class, the instructor had written on a test, "Can do better." When Holmes a Court complained to his old professor that the note had rankled for 30 years, the teacher replied, "Well, you have done better, haven't you?" Texaco could answer that.

With reporting by John Dunn/Melbourne