Icahn Sues Occidental and Threatens Fight for Board, Sale – Yahoo Finance

View photosIcahn Sues Occidental and Threatens Fight for Board, Sale(Bloomberg) — Activist investor Carl Icahn launched a lawsuit against Occidental Petroleum Corp. with the goal of potentially seeking board seats and a sale of the company.The billionaire investor said in the suit filed Thursday in Delaware Chancery Court that he’s built a $1.6 billion stake in Occidental and is upset by the company’s decision to acquire Anadarko Petroleum Corp. for $38 billion. Singled out for special criticism was the $10 billion in financing lined up from Warren Buffett’s Berkshire Hathaway Inc. and the lack of a shareholder vote.”The Anadarko deal is very much a bet-the-company deal from the point of view of the common stockholders,” Icahn said in the suit. ” Not consulting them on the deal was disenfranchising at a minimum.”Icahn, 83, accused the company of structuring the Anadarko deal without a shareholder vote so that “it’s a close, and unfortunate, certainty” the transaction will be finalized later this year. He urged Occidental to complete the acquisition as inexpensively as possible, then immediately launch a strategic review, including a potential sale of the combined company.”It certainly should be explored by the board, as should all other feasible strategic options,” Icahn said.Occidental said in a statement it would respond to Icahn’s suit “in due course,” and said it planned to close the Anadarko transaction in the coming months.“Our acquisition of Anadarko will create a global energy leader with a highly complementary asset portfolio and a unique opportunity to deliver compelling value and returns to the shareholders of both companies,” Occidental said.Icahn said he’s considering soliciting other shareholders to call a special meeting to potentially elect new board members. Occidental shareholders voted earlier this month to lower the threshold to call a special meeting to 15% from 25%, going against the board’s recommendation.Icahn’s stake is roughly 4% of the company’s outstanding shares, according to Bloomberg calculations. He would therefore require substantial support from other holders to call a meeting. Several institutional investors do have mandates to support a call for a special meeting even if they don’t support the proposals that would be presented.Occidental shares have fallen about 15% year to date. The shares were down 0.3% to $51.86 as of 3:41 p.m. in New York, after initially rising as much as 2.3% when the suit was reported. Anadarko fell as much as 2.5% before paring those losses.Representatives for Anadarko and Buffett didn’t immediately respond to requests for comment.Buffett DealFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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