Occidental Urges Investors to Reject Icahn Board Effort -- WSJ

By Dave Sebastian 

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 (July 23, 2019).

Leaders of Occidental Petroleum Corp. are pushing their shareholders to reject billionaire investor Carl Icahn's bid to replace four directors at the company, urging them to not sign Mr. Icahn's written requests for a board shakeup.

Last week, Mr. Icahn and his multiple affiliates filed a solicitation statement with the U.S. Securities and Exchange Commission for the board reorganization.

Mr. Icahn said the company's current directors made a number of mistakes in pursuing Anadarko Petroleum Corp. Occidental is set to acquire Anadarko for $38 billion, after waging a bidding war with Chevron Corp. In a letter Monday, Mr. Icahn echoed his criticism of Occidental's planned acquisition.

Occidental's most recent annual meeting was in early May and another director election about 10 weeks later isn't in Occidental's and stockholders' best interests, said Vicki Hollub, Occidental's president and chief executive officer, and Eugene Batchelder, Occidental's board chairman, in a shareholder letter.

Ms. Hollub and Mr. Batchelder said in the letter that Mr. Icahn doesn't understand the strategic or financial merits of the Anadarko deal.

They also said they believe Mr. Icahn's board nominees would interfere with Occidental's ability to integrate Anadarko's assets and complete its divestiture and deleveraging plan.

Mr. Icahn told The Wall Street Journal that he seeks to prevent Occidental from striking future deals that would hurt the value of the company.

"We are not going to micromanage the Anadarko deal," Mr. Icahn said by phone. "That milk has been spilled."

Mr. Icahn's nominees include Nicholas Graziano, a portfolio manager at Icahn Capital, and Andrew Langham, general counsel of Icahn Enterprises LP.

Mr. Icahn is also nominating John Hofmeister, the founder and chief executive officer of not-for-profit association Citizens for Affordable Energy and a former president of Shell Oil Co., and Alan LeFevre, a board member of Herbalife Nutrition Ltd. and former chief financial officer of Jarden Corp.

Through his various affiliates, Mr. Icahn has about a 4.4% stake in Occidental.

In buying Anadarko, Occidental is gaining prized assets in the Permian Basin of West Texas and New Mexico.

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. 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.

(END) Dow Jones Newswires

July 23, 2019 02:47 ET (06:47 GMT)

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