Transocean energy stock rises with the end of Icahn's proxy battle

Transocean energy proxy battle ends; Icahn and investors rejoice.
Posted By Sonali Basak  |  Nov. 11, 2013 at 5:47 PM
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(UPI) -- Transocean, the world's largest off-shore drilling company, has negotiated a deal with billionaire activist investor, Carl Icahn, after a months-long proxy battle.

The Switzerland-based company agreed to raise dividends 34 percent to $3 per share, negotiating Icahn's initial request of $4 per share. Icahn is the company's third largest shareholder. The company also agreed to cut down its board to 11 members from 14, with two seats reserved for the Icahn Group.

The total dividend payment will be almost $1.1 billion to shareholders.

Transocean committed to increasing margins by $800 million after fighting Icahn "tooth and nail." The company reported earlier this year to cut costs by $300 million by 2014.

Investors applauded the move, as the stock lifted 3.9 percent to $55.52 Monday, while other energy companies in the S&P 500 saw a 0.3 percent increase. The stock is expected to continue to rise toward $62 over the next year.

The company has underperformed in the past year, partially due to the proxy battle and a more than $1.4 billion settlement in early 2013 with the Department of Justice after the 2010 BP oil rig disaster in the Gulf of Mexico.

Activist investor Carl Icahn is known to be active in expressing his investing views on Twitter.

RIG is Transocean's stock ticker. Icahn also remarked in a Transocean release, "I believe that Transocean is now on the road to realize its great potential." Icahn also commended the company's move toward a "Master Limited Partnership," where an initial public offering of a minority interest in the company will be sold by mid-2014.

Vincent Intrieri, a former Icahn Capital executive, is to be elected to Transocean's board of directors. He currently sits on several energy company boards, including Chesapeake Energy, CVR Energy and Dynegy. Icahn Capital Managing Director Samuel Merksamer is also to be re-elected to the Transocean board.

Icahn also threatened a proxy battle with Apple earlier this year. On Monday, he pressured Apple CEO Tim Cook to buy back $150 billion in stock, pushing Apple shares down in after-hours trading.

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