Activist investor Carl Icahn is pushing to oust and replace four directors at Occidental Petroleum’s board over what he recently labeled a misguided “bet-the-company” acquisition of Anadarko by Oxy in which he owns shares.
The 83-year-old whose net worth has been estimated at around $18 billion, has previously slammed Oxy over its decision to pay a significant portion of the $38 billion acquisition fee in cash, with the aim to avoid the shareholder vote, and has also criticized what he believed was a bad $10 billion financing deal with Warren Buffett’s Berkshire Hathaway.He also said that Oxy should’ve put itself up for sale.
Icahn in May sued Oxy seeking court permission to grant him access to certain books and records of the company, “relating to its fundamentally misguided and hugely overpriced acquisition of Anadarko Petroleum Corporation after a bidding contest between the Company and Chevron.”
In a filing this week Icahn, who says owns around 4.4% stake in Oxy, said: “The Icahn Participants … believe that the [ Oxy’s ] current directors have made a number of mistakes in how and at what cost they pursued the acquisition of Anadarko Petroleum Corporation.”
Icahn said in a statement that “it is important to add new directors to Occidental’s Board of Directors to oversee future extraordinary transactions like the Anadarko transaction and to ensure that they are not consummated without stockholder approval when appropriate.”
He also said that the new directors could help with achieving “the Board’s and management’s projected stated cost savings and deal synergies for the Anadarko transaction.”
Icahn is also seeking to remove and replace four Occidental directors and to amend the Charter and By-laws through a stockholder consent solicitation.
In a filing this week, Icahn Participants said the conditions Oxy has imposed on the stockholders right to call for a special stockholders meeting are overly restrictive and “effectively deprive stockholders of the ability to exercise this right.”
The Icahn Participants further said that the current setup whereby the Oxy’s Board may wait up to 90 days after a request for holding a Special Meeting meeting “greatly diminishes the accountability of management to respond to stockholder initiatives and concerns.”
Related: Anadarko, Oxy sign takeover deal
Subject to receiving other shareholders’ support, Icahn Participants said they’d ask for four Oxy directors to be removed and replaced by other four director nominees related to Icahn.
If elected, Icahn Participants said, each Director Nominee will serve as a director until the company’s annual meeting in 2020 and until a successor has been duly elected.
“The Director Nominees, if elected, will support stockholders’ ability to act by written consent without the restrictive and burdensome requirements currently in place,” the Icahn filing read, adding that if elected director nominees would also support the reduction of the required threshold to request a special meeting.
As for his May attempt to get insight into Oxy’s book, Icahn said that Oxy on June 14 responded: “the [ Icahn] plaintiffs had not stated a proper purpose for the inspection of the Company’s books and records and denying that the plaintiffs were entitled to any relief.”
Responding to Carl Icahn’s move, Occidental issued the following statement: “We maintain an open dialogue with all our shareholders and welcome constructive input toward our shared goal of maximizing long-term value. Our Board is committed to acting in the best interests of Occidental shareholders and will continue to take actions to drive value on their behalf.
“We remain focused on completing our transaction with Anadarko in the second half of 2019, which we believe will create significant value and enhanced returns for shareholders.
“We will review the latest materials filed by Mr. Icahn and look forward to addressing them in our ongoing conversations with Occidental shareholders.”
Offshore Energy Today Staff
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