Billionaire investor Carl Icahn is to strengthen his grip on drilling giant Transocean – and win a near £650million payout for shareholders.
The self-styled activist investor is on the verge of getting a second seat on the Transocean board.
The businessman will look to push through the changes at the firm’s AGM next month, alongside measures to reduce the size of the driller’s executive committee from 14 to 11.
Papers prepared for the meeting confirm that Mr Icahn has been successful in securing a $3 per share (£1.79) dividend for shareholders – up 34% on last year.
The deal will land him £38million alone.
Mr Icahn entered into an agreement with Transocean, based on his 6% interest in the company, in November.
Under the terms, Transocean – which employs hundreds of people out of Aberdeen – has agreed to raise dividends and increase margins by £500million by 2015 through a process of cost-cutting and improved efficiency.
His end of the deal is an assurance that he will restrict his moves on the company.
In the company’s annual report to shareholders, published yesterday, chief executive Steven Newman honours the agreement and recommends that shareholders back the $3 dividend.
“We remain committed to returning excess cash to our shareholders,” he says.
The same report reveals that Mr Newman was paid more than £8million in 2013.
Transocean recently reported a 49% drop in its fourth quarter profits due to increased costs and lower fleet utilisation.
The company closed the fourth quarter of 2013 on a net income of £139million, compared to £272million a year earlier, as overall costs and expenses climbed 5.7%.
The firm’s cash flows were impaired by £334million in payments associated with the January 2013 Macondo disaster settlement with the US Department of Justice.
The company is not Mr Icahn’s only oil and gas interest. In October, he snapped up more than 60million shares in oil giant Talisman.
The £186million investment made him the second-largest shareholder at Talisman, and follows on from his initial investment in 4.8million shares in 2007 when the company was facing pressure to boost its share price.
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