A controversial billionaire has snapped up more than 60million shares in oil giant Talisman – and is eyeing a seat on its board.
Activist investor Carl Icahn, the 18th richest man in America, announced yesterday that he has invested £186million in the firm, which has 2,500 staff and contractors in Aberdeen, and 11 North Sea installations.
Experts are now predicting the company’s share price will jump. In August, the 77-year-old took to Twitter to announce a big stake in Apple – shares surged 9% in the week after the tweet.
Mr Icahn said yesterday that he intended to talk with Talisman’s management to discuss strategic alternatives for the company, including asset sales or restructuring.
Talisman recently sold a 49% stake in its North Sea business to Chinese firm Sinopec – creating Aberdeen-headquartered Talisman Sinopec.
North Sea industry expert Colin Welsh, chief executive of specialist corporate-finance adviser Simmons & Co International, believes the billionaire’s involvement will be beneficial.
“Talisman shareholders who have had a rough ride over the last year as the share price has slumped will be delighted to see Carl Icahn take this position,” he said.
“Irrespective of whether or not he goes on the board, he will force the board to respond to the under-performance and take the action that is needed to make Talisman a more attractive investment for shareholders.
“Activist investors are showing up a lot more frequently than they did in the past and it can only be a good thing because it keeps public company boards on their toes.”
The investment makes him its second-largest shareholder at Talisman. It is the second time he has taken a position at the firm. He acquired 4.8million shares in 2007, when the company was facing pressure to boost its share price.
Mr Icahn has built up his fortune with stakes in some of the world’s most famous companies – including Motorola, Time Warner and Fairmont Hotels.
However, Time Magazine described him as a ruthless “corporate raider” after his hostile takeover of US airline TWA in 1985.
He later sold TWA’s assets to repay the debt he used to purchase the company.
In 1988, he took TWA private, gaining a personal profit of $469million, and leaving TWA with a debt of $540million. The firm later merged with American Airlines
Energy experts at Forbes are already predicting that he could double his money from his stake in Talisman. It is estimated that the firm’s current assets are worth at least £11.8billion. But if production was optimised and the company streamlined, they could be worth nearly £17billion.
Many investors believe that Mr Icahn could be the man to squeeze the extra value out of the company.
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