Blitz On Boeing

Until now, T. Boone Pickens has limited his corporate raiding to the oil patch. But suddenly the investor, based in Amarillo, Texas, is taking a bit of advice from his best-selling autobiography, Boone: "It's important to show a new look periodically." Last week it was revealed that Pickens has set his sights on a surprising target: Boeing, the world's largest maker of commercial jets and a producer of military craft ranging from helicopters to cruise missiles. Pickens' investment group, Mesa Limited Partnership, is believed to have bought only about $15 million worth of Boeing's stock, or just .2% of the company's shares. But Mesa has filed for and received Government permission to buy up to 15% of Boeing, which would cost more than $1 billion.

Virtually no one on Wall Street believes Pickens intends to acquire Seattle-based Boeing (1986 sales: $16.3 billion) and become an aircraft tycoon. Nor is it likely that Pickens would succeed if he tried, since a hostile takeover could cost as much as $13 billion. Some investment pros believe Pickens aims to encourage a takeover bid by a large corporation like cash-rich Ford, which might be seeking high-tech acquisitions. As a major stockholder, Pickens could reap a fortune from any such merger. Alternatively, Pickens' strategy may be to force Boeing management to enhance its share price by launching a stock buy-back.

Pickens may have targeted Boeing precisely because of its depressed stock price: currently at 53, well below its estimated real value of at least 75. While the company has a lucrative backlog of nearly $30 billion in aircraft orders, earnings are in a slump because of price wars in the airliner business and the high costs of developing a new generation of passenger jets.

^ Responding to Pickens' move, the Boeing board last week adopted a so-called poison-pill defense, which would increase the amount of outstanding Boeing stock and thus effectively dilute the value of the shares a raider might own. Boeing management also huddled with Washington State's political leaders to discuss the possibility that the legislature might adopt emergency anti- takeover laws, as Minnesota and North Carolina did recently when local companies were pursued by outsiders. In Washington State, any threat to Boeing (total employment: 121,500) raises deep emotions. Moreover, Air Force Secretary Edward Aldridge said last week that the Pentagon might try to block Pickens if his raid is perceived as a threat to Boeing's military output.