Houston Chronicle

Icahn’s proxy war with Oxy gets a boost

- By Jordan Blum STAFF WRITER jordan.blum@chron.com twitter.com/jdblum23

Famed investor activist Carl Icahn got a boost in his feud with Occidental Petroleum when a major proxy advisory firm argued Thursday that his proposals at least warrant a shareholde­r vote.

While the prominent Institutio­nal Shareholde­r Services firm isn’t yet choosing sides on whether Icahn should be able to replace nearly half of the Oxy board, ISS contends the Houston oil and gas producer has prohibitiv­e procedures for calling a vote or a special board meeting.

Investors at least deserve to weigh in after Oxy agreed to buy The Woodlands-based Anadarko Petroleum for $38 billion, ISS concluded, especially since Oxy arranged for the deal to go through without requiring shareholde­rs’ approval.

Icahn built a nearly 5 percent ownership stake in Oxy after he was upset with the company’s successful bidding to acquire Anadarko. While Icahn admitted he can’t prevent the Anadarko deal from closing later this year, he could oust the Oxy leadership. Icahn contends Oxy is overpaying and unnecessar­ily risking its future.

In a multi-step process, Icahn first needs the support of holders of 20 percent of Oxy’s stock to jump start the process for setting a date so shareholde­rs can vote on the proposals, which is unlikely to happen before the deal is set to close later this year.

While ISS said Icahn’s effort may be a distractio­n during a complicate­d merger process, the firm said it is at least equally important for shareholde­rs to be able to weigh in on the process prior to the 2020 annual Oxy board meeting. ISS said shareholde­rs should be able to ascertain whether the Oxy board “has adopted a parental ‘I know best’ attitude towards shareholde­rs, or whether it can be trusted, in its current form, to represent shareholde­rs’ best interest in a more collaborat­ive manner.”

“The fact that shareholde­rs are seemingly being prevented from opining on a transforma­tional and controvers­ial transactio­n, along with the self-evident complexity of the consent solicitati­on process, suggests that a more open and thorough debate regarding Occidental’s strategic direction and overall governance would be beneficial,” ISS concluded.

But ISS also insisted that its opinion does not mean it supports Icahn’s board nominees.

While Oxy disagreed with ISS’ determinat­ion, Oxy said it agrees with the opinion that the Anadarko deal is transforma­tional and that Icahn’s effort is a distractio­n to Oxy achieving its goals.

Icahn’s four board nominees are former Shell Oil President John Hofmeister, Icahn Capital portfolio manager Nicholas Graziano, Icahn Enterprise­s general counsel Andrew Langham, and Alan LeFevre, who was previously named to a board seat at Herbalife after Icahn won a proxy bid there.

The four board members that Icahn is seeking to remove are Oxy Chairman Eugene Batchelder, a retired ConocoPhil­lips executive; Spencer Abraham, a former U.S. senator and energy secretary; Margaret Foran, a Prudential Financial senior executive; and Avedick Poladian, a former executive at real estate investor and developer Lowe Enterprise­s.

 ??  ?? Carl Icahn got a boost when an advisory firm argued his proposals merit shareholde­r considerat­ion.
Carl Icahn got a boost when an advisory firm argued his proposals merit shareholde­r considerat­ion.

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