Activist investor Carl Icahn and Transocean Ltd reportedly came to an agreement over a proxy battle that raged on for months, Reuters said. A proxy is an entity that provides insight on a company's governance to prospective and existing investors. Icahn is a known proxy in several companies including Yahoo, Mylan Laboratories, Amylin and Mentor Graphics (MENT).
The terms of the agreement betwen Transocean and Icahn include the former paying a USD3 dividend. Icahn had pressured the company to offer a USD4 dividend. Transocean would also be reducing the number of directors from fourteen board directors to eleven.
Icahn had been focusing on the largest drilling contractor in the world due to the company's lack of success in its mergers and development strategies, Reuters said. Icahn had launched a campaign to pressure Transocean to offer a equity payout increase and company board changes in its Switzerland headquarters. Icahn disclosed in January this year that he owned 5.6% interest in Transocean.
On Monday, Transocean said it would be implementing a yield vehicle similar to a Master Limited Partnership (MLP) for added financial flexibility. MLP would be listed in the middle of next year and that a minority interest would be sold at tha stage, Transocean said.
Part of the agreement would also re-elect Icahn Capital LP employee Samuel Merksamer to Transocean's company board. Vincent Intrieri would also be another addition to Transocean's board of directors. Intrieri was also employed by entities of Icahn's company in the last fiften years and has held investment-related roles.
Icahn addressed Transocean's company and payout measures also on Monday and said, "I am pleased that the board has agreed to add Vince Intrieri as a nominee, and to reduce the board size to eleven and I am especially happy about the commitment to pursue a MLP, raise the dividend and increase margins by $800 million through cost cutting and increased efficiency."
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