Takeover specialist Carl C. Icahn, whose $60-per-share bid for Texaco Inc. has met a heavy dose of skepticism on Wall Street, says he will have little problem raising the necesary cash to finance the buyout. Meeting with securities analysts Thursday, Icahn said he would have to borrow $8.86 billion to complete his offer, made last week, to buy the 86.2 percent of the company's stock he does not already own for $12.4 billion. The bid put a total value on Texaco's 207 million shares of $14.6 billion. To complete the deal, Icahn said he would sell two subsidiaries _ Texaco Canada Inc. and the company's 50 percent interest in Caltex, among other provisions. He then would borrow against the $2.98 billion cash flow expected to be generated this year to obtain the remainder, Icahn said. Texaco later scoffed at the plan, calling Icahn's offer ``still illusory'' and dismissing the details he provided as ``sketchy, sloppy and wrong.'' Icahn, Texaco's largest shareholder, launched a proxy fight for five of the company's 14 board seats on Friday, after the board rejected his offer. He said he would have dropped the bid if Texaco had put it to a shareholder vote at the company's annual meeting later this month. If his five-man slate wins, Icahn said Thursday he is confident he would be able to persuade the board to sanction such a vote. As far as financing is concerned, ``We've had several banks tell us we would have no trouble raising that on the basis that (the takeover would be) on a friendly basis,'' Icahn said. On hostile terms, however, ``it would be just about impossible'' because of certain statutory requirements, he added. Texaco said in a statement issued from its White Plains, N.Y., headquarters that Icahn's $8.86 billion figure ``simply wished away or ignored more than $5 billion in debt and other obligations he would also have to immediately finance. ``Morgan Stanley & Co., our financial advisor, has informed Texaco that Icahn's plan is simply not financable in their opinion,'' the statement added. Securities analysts and the stock market have dimissed the offer as a ploy, either to lure other bidders into the ring, or to encourage Texaco's management to buy his shares or help him sell them to a third party. On the New York Stock Exchange, Texaco stock has traded just above $50 a share _ far below the $60 Icahn proposed. In late-morning trading on the New York Stock Exchange today, it stood at $50.37{ a share, down 25 cents. Icahn acknowledged that his own $60-per-share price was ``cheap,'' saying: ``If it were out for a vote, there's no doubt in my mind it would go higher, because there would be an auction.'' Asked what price he believed would be fair, Icahn replied: ``I'm not going to go into that.'' From the start, Texaco officials questioned whether Icahn could arrange financing for the deal, despite his pledge to put up $100 million that would be forfeited to the company if he failed to come up with the financing in time for Texaco's annual meeting June 17 in Tulsa, Okla. Icahn stipulated, however, that the $100 million would not be forfeited if another party topped his offer or if the Internal Revenue Service failed to assent to the plan. On Thursday, he said his message to shareholders was simple: ``Even if you don't like me, if you vote for me, I'm going to get you $60.'' And, he added, ``If I can't get you your $60, I'll resign and (Texaco) will get its $100 million.'' If his slate loses, Icahn said he would ``go away,'' and sell his shares ``in a secondary offer of some such thing.'' On another matter, Icahn also declined to comment on the interest in Texaco of Kohlberg Kravis Roberts & Co., an investment banking firm with a long record for conducting takeovers. In March Kohlberg said it bought 4.9 percent of Texaco's stock and asked permission from the Securities and Exchange Commission to up that stake to 15 percent. Icahn told reporters that he had spoken to Henry Kravis but stressed they were not collaborating. ``But that's not to say we have any deals with Henry Kravis, and we don't. We absolutely don't,'' he added. Icahn paid about $1.2 billion in building his Texaco stake, which is now worth about $1.8 billion. The amount he already has paid and the $12.4 billion he is offering for the remaining Texaco shares would put his total cost for acquiring the company at $13.6 billion _ the biggest sum ever paid in a corporate buyout. The biggest deal so far was the $13.4 billion acquisition of Gulf Corp. by Standard Oil Co. of California, now Chevron Corp., in 1984.
