Icahn Seeks to Oust Four Occidental Directors -- WSJ
June 27 2019 - 2:02AM
Dow Jones News
By Christopher M. Matthews
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (June 27, 2019).
Billionaire investor Carl Icahn is seeking to replace four
directors at Occidental Petroleum Corp., saying the company's board
mismanaged its $38 billion deal to buy Anadarko Petroleum Corp.
The company's pending deal revealed a lack of "effective
corporate governance," and it needs new directors to ensure the
acquisition realizes its cost savings, Mr. Icahn said in a letter
to shareholders disclosed in a securities filing Wednesday.
While Mr. Icahn has previously conceded that the deal is likely
to close despite some investor disapproval, he asked shareholders
to request that Occidental set a date to consider his proposal. He
said that is a necessary step in the process to nominate new
directors.
Mr. Icahn -- who holds $1.6 billion in Occidental shares, or
nearly 5% -- has said the Anadarko deal is "hugely overpriced" and
required the use of expensive financing, putting the company at
risk if oil prices fall.
"We will review the latest materials filed by Mr. Icahn and look
forward to addressing them in our ongoing conversations with
Occidental shareholders," Occidental said in a statement. Anadarko
didn't immediately respond to requests for comment.
In a lawsuit Mr. Icahn filed against the company in May, he
argued Occidental should explore selling itself, saying that it
would be in the best interest of shareholders.
Occidental previously said in response to the lawsuit the deal
offered "a unique opportunity to deliver compelling value and
returns to the shareholders of both companies."
Occidental topped Chevron Corp. in a bidding war for Anadarko in
May, winning prized assets in the heart of the U.S. oil boom: the
Permian Basin of West Texas and New Mexico. Occidental's emergence
as the likely victor means it is poised to swallow a company nearly
its own size as it bulks up in the region.
Chevron had agreed to purchase Anadarko for about $33 billion on
April 12, but Occidental offered the oil company $38 billion on
April 24 and then sealed its bid by boosting the cash portion of
its offer. Occidental's deal with Anadarko is expected to close in
the second half of 2019.
A number of large Occidental shareholders, including T. Rowe
Price Group Inc., opposed the deal and voted against board members
at the company's annual meeting last month. The mutual-fund giant
and other investors said they were dismayed that Occidental's use
of external financing would allow the company to avoid a
shareholder vote on the transaction.
Occidental Chief Executive Vicki Hollub received about 78% of
shareholder votes to remain on the board at the annual shareholder
meeting in May. The lowest total received by any director was about
71% of the vote.
Mr. Icahn echoed T. Rowe's complaints in his letter.
"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," the letter
said.
Mr. Icahn also said he would seek to amend Occidental's bylaws
to make it easier for shareholders to call a special meeting.
Write to Christopher M. Matthews at
christopher.matthews@wsj.com
(END) Dow Jones Newswires
June 27, 2019 02:47 ET (06:47 GMT)
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