Carl Icahn criticizes OXY
Carl Icahn is now calling for a special shareholder meeting where he hopes to win board seats. On June 24, while discussing the Eldorado Resorts (ERI) and Caesars Entertainment merger (CZR), Icahn criticized the Occidental Petroleum (OXY) and Anadarko (APC) merger. He said, “Unfortunately, there are far too many boards that unlike Caesars, believe corporations are more like feudal systems, than democracies; that stockholders are the peasants who represent a necessary evil that must be tolerated, possibly patronized, but certainly ignored. Much like the feudal barons, they hire mercenaries (lawyers and investment bankers) to deal with these peasants (stockholders), if they become too unruly.”
Icahn on OXY destroying shareholder value
He added that the recent Occidental Petroleum “fiasco” is a great example of what lengths boards can go to serve their own interests. He believes that in this deal, shareholders will lose out.
The lawsuit filed by Icahn stated, “if management’s dreams of glory require placing the stockholders’ dividends at risk, the stockholders really ought to be asked whether they agree.” After the completion of the acquisition, Occidental’s debt is expected to quadruple to $40 billion. This deal comes at a time when shareholders are demanding spending cuts and higher dividends from the company.
T. Rowe Price Group, another significant shareholder, was also opposed to Occidental’s bid for Anadarko without first consulting with shareholders. Icahn also believes that the deal is inappropriate given the current market environment of low oil prices.