SandRidge directors reject Icahn demands
SandRidge Energy Inc. directors on Tuesday rejected activist investor Carl Icahn’s calls to shake up the board.
In an open letter to SandRidge shareholders, the board’s independent directors said they met last week with Icahn and other shareholders and said Icahn’s proposals are not in the best interest of the majority of the company’s stockholders.
“The board believes that changes to the composition of the board of directors and other major governance changes, as proposed by Mr. Icahn, should be made with the fully informed approval of a majority of all the company’s shareholders, rather than at the behest of one,” the directors said in the statement.
Icahn on Jan. 9 called for two of SandRidge’s five directors to resign and to be replaced by new directors designated by shareholders, including one of his choosing. The activist shareholder also said at least four of the five directors should be required to agree before the approval of any “extraordinary transactions” — including acquisitions, divestitures and equity issuances.
Icahn also asked the directors to drop a so-called poison pill measure put in place in November after Icahn gained a 13.5 percent stake in the company.
While the directors said they will oppose Icahn’s requests for the board changes, they said they will change the poison pill trigger threshold to a 15 percent stake in the company and will remove language about shareholders “acting in concert.”
“Given the current shareholdings of our shareholder base, the board believes that increasing the trigger threshold above 15 percent would primarily benefit Mr. Icahn in his efforts to take control of the company without paying our shareholders a control premium, which the board unanimously agrees is not in the best interest of all of our shareholders,” the directors said in Tuesday’s statement.
Icahn made his January requests less than two weeks after SandRidge directors bowed to his earlier demand to cancel its plans to buy Coloradobased Bonanza Creek Energy for $746 million.
“We were obviously pleased that you made the wise choice to terminate
the Bonanza merger agreement, but we still have grave concerns about many of the things this board of directors has permitted to happen at SandRidge,” Icahn said in the letter filed with federal regulators Jan 9.
The directors said Tuesday they met last week with several large shareholders to discuss and seek input on a wide variety of topics, including the company’s objectives, assets,
economic growth alternatives, financing strategies and Icahn’s proposals.
“We look forward to continuing expanded dialogue with all of our shareholders,” the directors said in the statement. “Over the next several weeks, we will also give careful consideration to other concerns voiced by the shareholders and will develop, implement and communicate each plan of action.”