Icahn Seeks to Oust Four Occidental Directors -- WSJ

By Christopher M. Matthews 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (June 27, 2019).

Billionaire investor Carl Icahn is seeking to replace four directors at Occidental Petroleum Corp., saying the company's board mismanaged its $38 billion deal to buy Anadarko Petroleum Corp.

The company's pending deal revealed a lack of "effective corporate governance," and it needs new directors to ensure the acquisition realizes its cost savings, Mr. Icahn said in a letter to shareholders disclosed in a securities filing Wednesday.

While Mr. Icahn has previously conceded that the deal is likely to close despite some investor disapproval, he asked shareholders to request that Occidental set a date to consider his proposal. He said that is a necessary step in the process to nominate new directors.

Mr. Icahn -- who holds $1.6 billion in Occidental shares, or nearly 5% -- has said the Anadarko deal is "hugely overpriced" and required the use of expensive financing, putting the company at risk if oil prices fall.

"We will review the latest materials filed by Mr. Icahn and look forward to addressing them in our ongoing conversations with Occidental shareholders," Occidental said in a statement. Anadarko didn't immediately respond to requests for comment.

In a lawsuit Mr. Icahn filed against the company in May, he argued Occidental should explore selling itself, saying that it would be in the best interest of shareholders.

Occidental previously said in response to the lawsuit the deal offered "a unique opportunity to deliver compelling value and returns to the shareholders of both companies."

Occidental topped Chevron Corp. in a bidding war for Anadarko in May, winning prized assets in the heart of the U.S. oil boom: the Permian Basin of West Texas and New Mexico. Occidental's emergence as the likely victor means it is poised to swallow a company nearly its own size as it bulks up in the region.

Chevron had agreed to purchase Anadarko for about $33 billion on April 12, but Occidental offered the oil company $38 billion on April 24 and then sealed its bid by boosting the cash portion of its offer. Occidental's deal with Anadarko is expected to close in the second half of 2019.

A number of large Occidental shareholders, including T. Rowe Price Group Inc., opposed the deal and voted against board members at the company's annual meeting last month. The mutual-fund giant and other investors said they were dismayed that Occidental's use of external financing would allow the company to avoid a shareholder vote on the transaction.

Occidental Chief Executive Vicki Hollub received about 78% of shareholder votes to remain on the board at the annual shareholder meeting in May. The lowest total received by any director was about 71% of the vote.

Mr. Icahn echoed T. Rowe's complaints in his letter.

"It is important to add new directors to Occidental's Board of Directors to oversee future extraordinary transactions like the Anadarko transaction and to ensure that they are not consummated without stockholder approval when appropriate," the letter said.

Mr. Icahn also said he would seek to amend Occidental's bylaws to make it easier for shareholders to call a special meeting.

Write to Christopher M. Matthews at [e-mail]

(END) Dow Jones Newswires

June 27, 2019 02:47 ET (06:47 GMT)

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