Occidental Nears Settlement With Carl Icahn -- Update

By Cara Lombardo and Rebecca Elliott 

Occidental Petroleum Corp. is nearing a truce with Carl Icahn that would conclude one of the highest-profile corporate clashes of the past year and usher the activist investor into the embattled oil producer's board room as it seeks to recover from a series of setbacks.

Andrew Langham and Nicholas Graziano, two lieutenants of the billionaire investor, would receive seats on Occidental's board under the terms currently being discussed, people familiar with the matter said. Mr. Icahn and the company would also mutually agree on a third, independent director, who is likely to be Herbalife Nutrition Ltd. board member Margarita Paláu-Hernández, some of the people said.

As part of the deal, Mr. Icahn would also bless Occidental's plan to bring back Stephen Chazen, its former chief executive, as chairman, as The Wall Street Journal reported this past week.

Occidental CEO Vicki Hollub, who has come under fire from Mr. Icahn, is expected to retain her position.

The agreement could become official as soon as Monday, the people said, cautioning that the situation is still fluid.

It would enable Occidental to put behind it a major distraction at a time when the company is reeling from dual shocks that have sent crude below $30 a barrel.

For his part, Mr. Icahn, who had been seeking to replace the entire board, would now get a say in how Occidental tries to maneuver its way out of its current jam. Mr. Icahn has lost an estimated $1 billion or more on his investment between his initial position, purchased last year, and the hundreds of millions of dollars worth of additional shares he bought recently.

Should a settlement come together, it would also allow both sides to avoid the expenses and mudslinging of a prolonged proxy fight leading up to the company's annual meeting, expected to be held this spring.

Occidental's stock price has plummeted in recent weeks as oil prices get hammered by a Saudi-Russian price war and the economic fallout from the coronavirus. The stock has lost nearly 90% of its value in less than two years, closing Friday at $10.23. The Houston company earlier this month cut its dividend by nearly 90% and implemented other cost-cutting measures.

Mr. Icahn first took aim at Occidental in late May after it agreed to pay $38 billion to purchase Anadarko Petroleum Corp., outbidding larger rival Chevron Corp. Occidental's market value has plummeted to less than $10 billion from well over $40 billion before it struck the deal for Anadarko.

Mr. Icahn, who owns roughly 10% of the company's shares, has criticized Ms. Hollub for spearheading the acquisition, which stretched the company's balance sheet and hampered its ability to weather the current crisis.

Occidental has been scrambling to retool and besides the dividend cut has said its current chairman would step down. It also added the former CEO of Schlumberger Ltd. and a former BlackRock Inc. portfolio manager to its board.

The company had been planning to name Jack Moore as its new chairman but more recently decided to tap Mr. Chazen instead. Mr. Icahn in the past had considered adding Mr. Chazen to his own slate of nominees.

--Christopher M. Matthews contributed to this article.

Write to Cara Lombardo at [e-mail] and Rebecca Elliott at [e-mail]

(END) Dow Jones Newswires

March 22, 2020 12:34 ET (16:34 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.