Billionaire Carl Icahn has written an open letter to Occidental Petroleum (NYSE:OXY) shareholders, calling out the company's management for its $37 billion acquisition of Anadarko Petroleum last year, an action he alleges "... destroyed over $30 billion in stockholder value."
In particular, Icahn, who owns about 2.5% of Oxy, has made it clear he thinks the company substantially overpaid for Anadarko and destroyed billions in shareholder value. That's a position many in the energy industry agree with, but Icahn takes his argument a step further in his letter, claiming that he thinks Oxy CEO Vicki Hollub and Chairman Gene Batchelder, along with the rest of the company's board, were "...fearful that OXY would be acquired" and "...were focused on protecting their jobs" by acquiring Anadarko, thus preventing another company from trying to acquire Oxy.
A job-saving move?
In his open letter, Icahn further says that he has requested the company to provide more information about the transaction, and that it has not provided any of the documents requested. His assertion is that there were other companies who viewed Occidental as an attractive acquisition target, and that management and the board's decision to acquire Anadarko was done to keep it from being acquired, and that the deal was structured in a way that both avoided a shareholder vote that could have stopped the deal from happening, and further allowing it to keep information about potential acquirers of Occidental from becoming public information.
Agitating for accountability
In addition to his demands for transparency from Occidental's management and board, Icahn's open letter urges shareholders to participate in the company's 2020 annual meeting, and "...to cast their votes and demand accountability" from the company's management and board later this year. Occidental shares have lost more than 30% of their value since April 2019, when its bid for Anadarko was first announced.