EVERY FEW MONTHS, I get a phone call from Fort Worth’s Richard Rainwater, one of the most powerful corporate dealmakers in the country. He tells me he has received my latest letter and, no, he is still not going to do an interview—but he has enjoyed hearing from me anyway. He always seems in the best of spirits. Once he called me from an airplane to say he was on his way to watch a drag race. Another time he called from Rome, where he and wife, Darla, a former Chemical Bank executive he calls Little Precious, were on vacation. Most recently, he called from Canyon Ranch, the exclusive spa in Arizona—he told me he had lost twenty pounds and had played golf with T. Boone Pickens.
Ah, Boone Pickens. If there was any doubt about the financial power and investment nerve of 52-year-old Rainwater, it was erased this past spring by his decision to invest in Mesa, Pickens’ once-feared oil and gas company. In the eighties, with his hostile takeover bids of such oil majors as Gulf Oil and Phillips Petroleum, Pickens became America’s first great corporate raider, ushering in the takeover mania soon to grip Wall Street. But by 1996, Mesa was swamped with a $1.2 billion debt and the company’s stock had plunged from $68 3/4 a share to $2 5/8. Because prices for natural gas, Mesa’s biggest asset, were at rock bottom, bankruptcy appeared certain.
Then Rainwater made his move, buying $133 million worth of stock (and offering to buy as much as $132 million more) in exchange for four seats on the board. Pickens agreed to step down as chairman and CEO so that Rainwater could install his team of executives. Oil and gas industry analysts were flabbergasted. They said that because no dramatic price increases were expected for the natural gas industry, Mesa’s hopes for a turnaround were slim.
But those who knew anything about Rainwater’s history were reluctant to second-guess