Mr. Icahn—who disclosed he holds $1.6 billion in Occidental
shares, or nearly 5%—is seeking records in connection with
the Anadarko deal through a lawsuit filed in Delaware. The
lawsuit conceded that the deal is likely to close, but said
Mr. Icahn is seeking information to determine whether to
rally shareholders to call for a special meeting to elect
new board members.
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The lawsuit states that the
Anadarko deal is
hugely overpriced and puts Occidental at risk
if oil prices fall. Mr. Icahn added Occidental should
explore selling itself, arguing that it would be in the
best interest of shareholders.
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Mr. Icahn is considering pushing for a special meeting
“to potentially elect new directors to ensure that
Occidental is being run in the interests of its
stockholders going forward, and not in the interests of
directors and officers who appear to be interested in
growth for growth’s sake,” the lawsuit said.
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Occidental said in a statement that the deal offered “a
unique opportunity to deliver compelling value and
returns to the shareholders of both companies,” adding
We will respond in due course to the
suit. Anadarko did not respond to a request for comment.
Both Occidental’s and Anadarko’s shares were slightly
down Thursday afternoon.
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Occidental topped Chevron Corp. CVX in
a bidding war for Anadarko earlier this month, 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 now 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.
Occidental’s aggressive
efforts to win Anadarko included lining up $10
billion in financial backing, from Warren
Buffett’s Berkshire Hathaway Inc., BRK.B via
the sale of preferred stock—and included a deal to sell
Anadarko’s Africa assets for $8.8 billion to French oil
giant Total SA TOT .
Mr. Icahn questioned both the Berkshire financing and
the Total deal in the lawsuit, saying both were rushed
and costly to Occidental. Mr. Icahn also said the
transactions showed the inexperience of Occidental CEO
Vicki Hollub in mergers and acquisitions.
[A] ninety-minute deal ‘negotiation with one of
history’s canniest investors, is no place to gain M&A
experience—at least if you care about protecting your
stockholders,” the lawsuit said, referring to the talks
with Mr. Buffett