Icahn wins control of SandRidge board
SandRidge Energy stock jumped sharply Tuesday after shareholders voted to give billionaire activist Carl Icahn control of a majority of the Oklahoma City energy firm’s board seats. Icahn’s candidates won at least four seats on the firm’s seven-seat board of directors after a bitter campaign. SandRidge’s largest shareholder, Icahn has said he might buy the troubled firm, which emerged from bankruptcy last year, if he gained control of the board. SandRidge has been soliciting and evaluating offers to buy or partner with the company. Interim CEO Bill Griffin said he “can’t predict the outcome” of the newly elected board.
Activist investor Carl Icahn has gained control of SandRidge Energy Inc., claiming a majority of the company’s directors during Tuesday morning’s annual meeting.
At least four of Icahn’s seven nominees won seats on the board. Two SandRidge incumbent directors were re-elected, and the seventh seat was considered too close to call during the meeting. A final tally was expected later.
Tuesday’s vote caps a proxy fight that has been ongoing since late last year when Icahn bought a 13.5 percent stake in SandRidge and became its largest shareholder.
Shares of SandRidge jumped Tuesday after the result, gaining more than 7 percent to close at $17.02, a four-month high.
SandRidge shares were the day’s fourth-biggest gainer on the New York Stock Exchange. The third-biggest NYSE gainer was Tulsa’s Midstates Petroleum, which issued a takeover bid of SandRidge in January that SandRidge’s directors rejected in March.
The SandRidge directors had asked its shareholders to re-elect all five incumbent directors along with two new directors nominated by Icahn. The activist investor, however, asked shareholders to reject the incumbent directors, instead electing a full slate of seven of his own nominees.
“The bottom line is we knew going in by expanding the
board to seven we were going to have a change in the leadership of this company,” SandRidge interim CEO Bill Griffin said following Tuesday’s meeting. “What it means for the company going forward is the decision’s been made and we have a new board.
“We will bring them up to speed as quickly as we can on what we’ve accomplished to date, where we are with the strategic process and then look to see if there’s any change in direction. But I can’t predict that outcome. Whether we’ll continue on just as we’re doing or if there will be some changes, that’s for the new board to decide.”
Icahn could not be reached for comment Tuesday.
Rancor in regulatory filings
Over the past several months, the incumbent directors and Icahn have exchanged sharp attacks in regulatory filings. Icahn has challenged the incumbent board’s decisions and direction. The incumbent directors have said Icahn is attempting to bypass the company’s ongoing strategic review by taking control of the board.
SandRidge is in the midst of an effort to solicit and evaluate offers to buy or partner with the company. Icahn has said he would consider making an offer to buy the company if he gains control of the board.
Griffin said Tuesday the filings are typical of such proxy fights. “It goes with the territory in these types of contests. There’s going to be a lot of exchanges,” he said. “The bottom line is what is resulted in is dialogue about the next best steps for SandRidge. I have full confidence that every member of the board is going to be aligned and we want this company to move forward and be successful. That’s what boards are for, to have debate about what those next steps are. I have no doubt we will work together just fine.”
Shareholders on Tuesday re-elected Griffin and Sylvia K. Barnes, the newest director who joined the board in February when the directors ousted CEO James Bennett and Chief Financial Officer Julian Bott.
Shareholders on Tuesday also elected Icahn nominees Bob G. Alexander, Jonathan Christodoro, John J. “Jack” Lipinski and Randolph C. Read.
The four Icahn nominees elected were the candidates endorsed by independent proxy advisers Glass, Lewis & Co. and Institutional Shareholder Services Inc. (ISS).
Both firms recommended SandRidge directors retain a majority of the board, but they disagreed about which Icahn nominees should be elected. Both supported Lipinski and Reed, but ISS also recommended Christodoro while Glass Lewis supported Alexander.
“We have a new board. The shareholders have made their decision,” Griffin said Tuesday. “We have to work together and bring this company forward to where it needs to be, that is a recognition we have quality assets and we have a good plan to grow this organization with or without a strategic change in direction.
“This company, with or without other transactions, has the ability to grow profitably. That is most important as we focus on getting the next step behind us and moving forward with a long-term plan.”
Also on Tuesday, shareholders rejected a company proposal to extend the poison pill designed to limit Icahn’s ability to control the company. Shareholders also rejected the company’s executive compensation plan.