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Billionaire Investor Icahn In Proxy Fight For Occidental Board Seats

Billionaire activist investor Carl Icahn, who holds 4.4 percent in Occidental Petroleum, filed on Thursday a Solicitation Statement with the SEC, officially launching a proxy fight to replace four Occidental board members because, Icahn says, “current directors have made a number of mistakes in how and at what cost they pursued the Anadarko transaction.”

This spring, Occidental outbid Chevron to sign a deal with Anadarko after it offered US$38 billion for the company, 80 percent of it in cash, in addition to the assumption of Anadarko’s debt. Initially, Oxy had offered 50 percent of the US$57-billion debt-including price in cash and the rest in stock, but Anadarko was reluctant to accept this bid. Oxy then upped the cash portion of the deal to 80 percent and won the approval of Anadarko’s board.

Icahn has criticized the Occidental deal with Anadarko and requested access to some details of the Oxy-Anadarko tie-up. The activist investor has also spoken and met with Occidental’s top management, including the CEO, to discuss his views on the company and the proposed deal for Anadarko, which Icahn has said has been “mismanaged.”

“The Icahn Participants believe that the Company’s current directors have made a number of mistakes in how and at what cost they pursued the Anadarko transaction. In addition to agreeing to expensive financing, the Company also structured the Anadarko transaction in a manner that deprived the stockholders of the Company of the right to vote on the transformational Anadarko transaction,” Icahn said in the filing to the SEC.

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“The Icahn Participants believe that the Anadarko transaction is a high-risk strategy that, if given the opportunity, may not have been approved by the Company’s stockholders. In the opinion of the Icahn Participants, the Board and management of the Company structured the transaction to avoid requiring stockholder approval, even though the terms and conditions of the Anadarko transaction will fundamentally transform the Company’s business and prospects.”

Speaking to Reuters on Thursday, Icahn said that “Occidental refused to craft a compromise and so we’ll happily take our case to stockholders which the company should have done with this bet-the-company transaction.”  

Earlier this month, Occidental called on its shareholders to vote against Icahn’s push to replace four members of the board of directors in a bid to prevent future deals of the magnitude of the Anadarko takeover.

By Tsvetana Paraskova for Oilprice.com

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