Icahn Sues Oxy Over 'Misguided' Anadarko Deal

By Jennifer Hiller
Thursday, May 30, 2019

Occidental Petroleum Corp 's activist investor Carl Icahn has filed a lawsuit against the company over what it called its "misguided" pact to buy Anadarko Petroleum Corp, and may seek a special meeting to remove and replace board members.

The lawsuit, filed on Thursday in Delaware by a group of Icahn companies, calls Occidental's recent agreement to purchase Anadarko for $38 billion "fundamentally misguided and hugely overpriced," and says "management wanted to avoid a vote at almost all costs."

Icahn, who has built a $1.6 billion position in the company, believes "that the Occidental board and management are in far over their heads, have made numerous blunders in recent months and might continue to trip over their feet if the board is not strengthened," the lawsuit said.

Occidental said it would "respond in due course" to the lawsuit and looks forward to closing the merger, which will increase earnings. "Occidental is committed to maximizing long-term value for all shareholders, and our Board and management team continually evaluate opportunities to that end," the company said.

The company's bid for Anadarko topped one by Chevron Corp and includes a pricey $10 billion financing deal with Warren Buffett's Berkshire Hathaway.

The lawsuit seeks to review documents that detail the sale of preferred stock to Berkshire and information on an agreed sale of Anadarko's Africa Assets to Total SA for $8.8 billion.

The deal would increase Occidental's debt to around $40 billion, assuming it sells the Africa assets to Total.

Icahn may seek to call a special meeting of shareholders to remove and replace directors, the suit said, and believes Occidental should have been a seller rather than a buyer in the current market.

"That would have been the stockholder-friendly thing to do," the suit said.

The Berkshire investment allowed Occidental to increase the cash portion of its bid for Anadarko, eliminating the need to win approval from its own shareholders.

The acquisition is "little more than an enormous bet on the price of oil," the lawsuit said, adding that "if management's dreams of glory require placing the stockholders' dividends at risk, the stockholders really ought to be asked whether they agree."

Icahn was not the only investor to take issue with the lack of a shareholder vote on the deal.

T. Rowe Price Group Inc said it would vote against the Occidental board of directors at the company's annual meeting earlier this month because the company would not allow shareholders to vote on its bid for Anadarko, which T. Rowe Price and other shareholders opposed.

Occidental shares were trading down 0.38% at $51.80 in afternoon trading on Thursday. The shares are down from $65.33 on April 12 when it was first rumored to be pursuing Anadarko.


(Reporting by Jennifer Hiller; additional reporting by Tom Hals; editing by Bernadette Baum and Susan Thomas)

Categories: Legal Finance Mergers & Acquisitions Industry News

Related Stories

MOL Puts FSRU for Indonesia's Jawa 1 LNG Power Plant Into Operation

Petronas Starts Construction of Malaysia's First Nearshore FLNG Facility

Exxon Mobil Continues to Ramp Up LNG Portfolio

Saipem Loads Out Three Topsides for QatarEnergy LNG’s North Field Gas Project

AG&P LNG Grabs Stake in $500M LNG Terminal in South Vietnam

Singapore's Temasek Shortlists Saudi Aramco, Shell in Sale of Pavilion Energy Assets

Woodside Sells 15.1% Scarborough Stake to JERA for $1.4B

Valeura Buys Nong Yao Field’s FSO Aurora and Expands Wassana Drilling Campaign

Borr Drilling Secures $82M for Three Jack-up Rigs

WoodMac: Asian LNG Demand Could Rise 5% in 2024

Current News

SOVs – Analyzing Current, Future Demand Drivers

Decarbonization Offshore O&G: Navigating the Path Forward

Subsea Vessel Market is Full Steam Ahead

China's Imports of Russian Oil Near Record High

TotalEnergies Inks $530M Deal to Acquire Malaysia’s SapuraOMV

Energy Storage on O&G Platforms - A Safety Boost, too?

Malampaya Gas Field Exceeds Export Capacity Amid Grid Demands in Philippines

Timor-Leste: Chuditch-2 Well to be Drilled at New Location Following Site Surveys

Akastor’s Subsidiary Wins $101M Case Against Seatrium's Jurong Shipyard

ONGC Hires Consortium to Deliver FEED Work for Bay of Bengal Oil Field

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com