Pickens Seeks 15% Stake of Singer, 2nd Aerospace Firm He’s Revealed an Interest in

In his second major foray into the aerospace industry, T. Boone Pickens Jr. said Friday that his Mesa Limited Partnership has gained control of 4.4% of Singer Co. shares and is seeking federal approval to acquire up to 15% of the Stamford, Conn.-based defense electronics firm.

Mesa disclosed Friday that it had notified the Federal Trade Commission under the Hart-Scott-Rodino Act of its intention to acquire the additional Singer shares and that it expects clearance within 30 days.

After a delayed opening, the price of Singer shares rose $4.625 to close at $51.50 on the New York Stock Exchange. Based on the current price, acquiring another 10.6% of Singer would cost Mesa about $114.4 million.

But some analysts expressed doubts about Pickens’ motives because Mesa voluntarily disclosed its holdings of Singer stock and its intentions to acquire more stock. They speculated that Pickens may already be liquidating his Singer position, because it would make no sense for him to drive up the price of Singer shares if he plans to buy more of them in 30 days.

Cost Not Indicated

Only last week, it was disclosed that Pickens had accumulated Boeing shares and sought federal approval to obtain 15% of that aerospace firm’s stock. But that disclosure came from Boeing, which was acting in its own defense by driving up its shares to raise the price of any hostile acquisition effort by Pickens.

Mesa did not indicate the average price that it paid for its 4.4% stake in Singer and a Mesa official did not return a reporter’s telephone call. But as recently as early July, Singer shares were selling for less than $40, indicating an increase so far of about 25%.

Singer, which has about 28,000 employees, had no comment to make on Mesa’s announcement, according to company spokesman Thomas L. Elliott Jr.

Unlike Boeing, Singer is considered vulnerable to a hostile investment by Pickens, according to Paul Nisbet, analyst at Prudential-Bache Securities. “Singer is not as well managed as Boeing,” Nisbet said. “You can see how you could break it up and get a good price for the pieces.”

Unlike Boeing’s cash hoard of $3 billion, Singer had only $13 million in cash at the end of 1986 and carried long-term debt of $311 million. In addition, Boeing is politically powerful in its home state of Washington and its board includes top executives of the nation’s largest corporations.

Joseph E. Campbell, an aerospace analyst for the Paine Webber brokerage, said Singer has four takeover defenses in place: staggered terms for its directors, a “super-majority” requirement on bylaws changes, a prohibition on paying “greenmail” to buy shares back from a corporate raider and a fair-price provision that permits directors to reject offers that may exceed the company’s market price.

No Poison Pill

But Singer has no “poison pill” defense, which would make a hostile acquisition less attractive, because the company is registered in New Jersey, where such provisions are prohibited.

“The amount of cash Pickens would need to manhandle Singer is considerably less than for Boeing,” Campbell said. “It would be pretty easy to split up.”

But Singer and Boeing both are considered undervalued, partly because they have performed below investor expectations. Singer lost $20.2 million on sales of $435.8 million in the second quarter of 1987 after reporting writeoffs on three defense programs.

If Singer is sold, it would join a number of other defense electronics companies that have been acquired in recent years. Sanders Associates, Argo, Hazeltine, Dalmo Victor and Sierra Research were all relatively small and fast-growing defense electronics companies that were acquired by larger contractors.