Washington State Arms Boeing With Shield Against Hostile Bids

OLYMPIA, Wash. — The Washington Legislature, meeting in emergency session, Monday approved by a wide margin a bill designed to help protect Boeing Co. from a hostile takeover threatened by corporate raider T. Boone Pickens.

The bill, requested by Boeing last month, when Texas oilman Pickens disclosed plans to acquire up to 15% of Boeing stock, seeks to deter hostile takeovers by barring any purchaser from liquidating company assets within five years of such a purchase. Such a prohibition would presumably make it difficult for hostile bidders to arrange takeover financing. The Washington law applies only to Boeing Co.

The measure was adopted by a vote of 67 to 12 in the state House of Representatives, and by a 44-to-2 vote in the state Senate. It was immediately signed into law by Gov. Booth Gardner.

Washington thus became the eighth state to enact a tough anti-takeover law since the U.S. Supreme Court last April upheld the constitutionality of state takeover regulation.

The Washington law’s freeze on asset sales is similar to measures in force in New York and Minnesota.

Many in Washington state were panicked by the prospect of a takeover threat to Boeing, which, with its payroll of 85,000 here, is the state’s largest private employer.

“Boeing is the most significant single component in the Washington economy,” John Anderson, head of the state department of commerce, declared at a public hearing last week.

One state representative, Art Wang, said the state “should send a message to corporate raiders . . . when they’re motivated only by greed.”

Boeing officials pressed for quick action on the bill, although some securities analysts have been skeptical that Pickens could take over the huge commercial aircraft and defense contractor, or even force a major restructuring. Boeing’s market value is more than $7 billion.

The company has said that while the law might not by itself block a determined bidder, it would at least buy the company time in which to prepare a defense.

A spokesman for Pickens could not be reached for comment Monday.