Occidental Urges Investors to Reject Icahn Board Effort -- WSJ
July 23 2019 - 3:02AM
Dow Jones News
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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