Icahn and Transocean Come to Terms Over Board of Directors, Dividend Payment

Michael Teague |

Carl IcahnLegendary activist investor Carl Icahn has been tireless in 2013.

The year kicked off with the unusually public conflict with fellow billionaire Bill Ackman over Herbalife (HLF), when the latter accused the company of being a pyramid scheme and devoted a whole presentation to explaining why the nutritional supplement company deserved to be shorted. Shortly thereafter, Icahn revealed a 13 percent stake in Herbalife, potentially saving the company’s shares.

More recently there has been the as-yet unresolved battle over PC-maker Dell Inc. (DELL), whose founder Michael Dell has partnered with Silverlake Management in an attempt to take the company private in order to have greater control over a much-needed turnaround process. Icahn, who has a 4.5 percent stake in the company, has teamed up with Southwestern Asset Management, who has an 8.2 percent stake, to propose his second counter-offer to Dell and Silverlake’s $13.65 per share buyout offer.

Icahn has also recently increased his stake in voice-recognition company Nuance Communications (NUAN) to 10.7 percent the day after shares dropped over 18 percent. Nuance, the firm that is credited with Apple Inc.’s (AAPL) Siri, reported disappointing earnings late last month that is widely believed to be the result of Apple’s recent troubles.

On Friday, the world’s largest offshore oil rig operator Transocean Ltd. (RIG) held its annual meeting in Vernier, Switzerland, where the company is headquartered. Transocean is infamous for its involvement in the April 2010 explosion at a rig that it was operating that spilled untold amounts of oil into the Gulf of Mexico, killing 9 of its employees.

Icahn is the company’s largest shareholder with a 5.6 percent stake, and has since January been pushing for changes to its board of directors, as well for a $4 per share dividend payout to investors. Shareholders approved Icahn’s candidate for the board of directors, Samuel Merksamer, while removing Chairman Michael Talbert, but rejected the dividend proposal, opting instead for the company’s previous offer of $2.24 per share.

Previously, Transocean CEO Steve Newman had called Icahn’s proposal “shortsighted,” and “irresponsible” given the potential turbulence and uncertainty the company still faces.

Icahn, who took over refiner CVR Energy (CVI) last year, was also involved last month in applying pressure to Chesapeake Energy (CHK) to make changes to its board of directors. The billionaire investor holds a nearly 9 percent stake in the company.

Any worry that Icahn has been spreading himself too thin, however, will have to contend with the fact that his publicly traded investment firm Icahn Enterprises (IEP) is up 95 percent so far in 2013, with shares currently trading at $87.59.

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Companies

Symbol Name Price Change % Volume
RIG Transocean Ltd (Switzerland) 13.35 -0.02 -0.15 15,106,662
HLF Herbalife Ltd. 47.99 -0.24 -0.50 1,176,576
IEP Icahn Enterprises L.P. 56.45 -1.01 -1.76 60,279
AAPL Apple Inc. 109.90 0.41 0.37 26,531,067
CVI CVR Energy Inc. 16.75 -0.55 -3.18 456,673
NUAN Nuance Communications Inc. 15.97 0.13 0.82 2,759,152
WFCPRV Wells Fargo n/a n/a n/a 0
CHK Chesapeake Energy Corporation 7.23 0.18 2.55 51,189,312

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