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Icahn-Affiliated Funds Seek $4 Dividend at Transocean

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Oil rig operator Transocean (NYSE: RIG  ) said in a statement that it had received notice from funds affiliated with activist investor Carl Icahn that they would push for a $4.00 per share annual dividend at the annual shareholder meeting. It had been expected Icahn would make such a proposal.

Following the oil spill at Transocean's Deepwater Horizon rig in the Gulf of Mexico, the rig operator suspended its annual $3.25 per share payment in a bid to preserve its investment-grade credit rating and maintain a "strong, flexible balance sheet."

As a result of pressure brought to bear by Icahn, Transocean's board agreed to reinstate the dividend, and said it will recommend an annual payout of $2.24 a share at the annual meeting. Icahn responded in an SEC filing Monday that said the amount was insufficient and it "further highlights a long track record of weak capital allocation strategy." Icahn also said he will seek to nominate at least three alternative director candidates "who we expect to provide a more shareholder friendly capital allocation strategy." 

Transocean remarked it will "evaluate the proposals in due course." 

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9/30/2016 4:04 PM
RIG $10.66 Up +0.03 +0.28%
Transocean CAPS Rating: ****