SandRidge directors and shareholder continue attacks
Less than a week before a key shareholder vote, SandRidge Energy Inc. directors and activist investor Carl Icahn continue to trade attacks.
The two sides extended their pattern of dueling regulatory filings this week when SandRidge directors repeated their criticisms of Icahn and his plan to gain control of the company’s board and Icahn responded by calling the effort a waste of shareholder money.
SandRidge’s latest salvo
In a letter to shareholders filed Monday, SandRidge directors restated their request that investors re-elect all five SandRidge directors along with two of Icahn’s nominees. The current directors also repeated their criticism of Icahn’s plans to work with Matthew Grubb, SandRidge’s former president and chief operating officer, saying he helped lead what Icahn has called a “debt-fueled acquisition spree” that reduced the company’s value and share price.
“Icahn is seeking to gain control of the company without paying an appropriate premium and disrupt the ongoing strategic review process at the expense of other shareholders,” the directors said in Monday’s letter. “There is no benefit to providing Icahn with additional board representation beyond the two independent nominees your board already recommends.”
Icahn has called for shareholders to reject the entire board, instead replacing the five directors with a full slate of seven nominees of his choosing. Icahn also has said that if he gains control of the board, he will consider making an offer to buy the company.
“Two new board members provide Icahn with board representation well in excess of its ownership, and the election of more than two Icahn could be detrimental to the progress of the impartial strategic review process and the future stability of SandRidge,” the directors said. “Electing additional Icahn nominees is unnecessary and would weaken the independence and diversity of the board and disrupt the ongoing strategic review process which is focused on increasing shareholder value for all shareholders.”
Icahn fires back
Icahn this week responded to the SandRidge director’s claims and to their earlier criticism that his investment at other energy companies has hurt those firms in the long run.
“In a last-ditch, desperate attempt to distract your attention away from their own horrible record, the incumbent directors have seen fit to hand millions upon millions of your dollars to ‘defense’ advisors to create pretty, colorful charts which intentionally misrepresent our investment record in the energy sector,” Icahn said in Monday’s letter to SandRidge shareholders.
Icahn said his investment in National Energy is most similar to his investment in SandRidge.
“During the holding period,wegreatlyenhanced values for all investors by finding the right management teams and working with them assiduously to grow the business through organic investment and through a series of bolt-on acquisitions,” Icahn said. “In addition, we installed operational and financial guidelines to improve the businesses, including realignment of the fixed asset costs structure, reserve life expansion by maintaining a highly successful drilling program and implementation of internal controls.”
Icahn said he sold his investment in National Energy in 2006 for $1.5 billion, a total return of more than 321 percent.
The vote is set to take place at the company’s annual meeting at 9 a.m. June 19 at SandRidge’s Oklahoma City headquarters.