Icahn, who owned a $1.6 billion stake in Occidental as of May 30, has been critical of Occidental’s pending purchase of rival Anadarko Petroleum. (Source: Shutterstock.com)
In the midst of a showdown with famed activist investor Carl Icahn, Occidental Petroleum Corp. added former managing director of BlackRock Advisors LLC, Robert “Bob” M. Shearer, to its board on July 10.
Icahn, who has been critical of Occidental’s pending purchase of rival Anadarko Petroleum Corp., unleashed plans in late June to oust and replace four Occidental directors. In a regulatory filing, the billionaire investor called for a special shareholder meeting to win board seats in order to change the company’s charter to prevent a similar takeover in the future.
In response, Occidental urged shareholders to reject Icahn’s moves saying the proposals “are not in the best interests of Occidental or its stockholders” and on July 10 elected Shearer to its board of directors. The addition of Shearer will grow the number of directors on Occidental’s nine-member board to 10.
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UPDATE:
Anadarko Shareholders To Vote Next Month On Occidental Deal
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Occidental expects Shearer’s 35 years of experience in securities and leading investment management firms will help the Houston-based independent E&P boost its shareholder returns. Gene L. Batchelder, chairman of the Occidental board, said Shearer’s experience includes “a track record of creating significant value for investors.”
“We are committed to growing our dividend as part our long-term strategy, and Bob’s industry knowledge and management expertise will be a great addition to our board,” Batchelder said in a statement on July 10.
Shortly after Shearer’s joining, the board declared an increase of the company’s regular quarterly dividend to $0.79 per share.
Shearer, 64, retired from BlackRock in 2017 after two decades with the asset management giant. Prior to retiring, he was co-head of BlackRock’s equity dividend team and a member of the fundamental equity platform within BlackRock’s portfolio management group. He also served as portfolio manager for both the BlackRock equity dividend fund and natural resources trust, which grew to over $50 billion from $500 million under his leadership, according to the Occidental release.
Shearer first joined Merrill Lynch Investment Managers where he managed the Merrill Lynch world natural resources portfolio before the firm merged with BlackRock in 2006.
In a statement, Shearer touted Occidental’s reputation and strategy, which he said sets the company apart in the industry.
“I am confident in Occidental’s ability to deliver on its long-term business strategy of industry-leading returns and returning capital to shareholders, and I look forward to supporting this commitment as a member of the board of directors,” he added.
Occidental agreed in May to acquire Anadarko Petroleum for roughly $57 billion comprised of 78% cash and 22% stock plus the assumption of Anadarko debt.
The transaction has been approved by the U.S. Federal Trade Commission and is expected to close in the second half of the year. Due to an increase to the cash component of Occidental’s bid made in order to top an offer from Chevron Corp., the deal does not require the approval of Occidental’s shareholders.
Icahn, who owned a $1.6 billion stake in Occidental as of May 30, has come out as an opponent of the deal. In addition to the possible proxy fight, he also sued Occidental in Delaware court following the announcement of the merger in May in hopes of gaining access to the company’s financial records and details of negotiations.
“It is important to add new directors to Occidental’s board of directors to oversee future extraordinary transactions like the Anadarko transaction and to ensure that they are not consummated without stockholder approval when appropriate,” Icahn said in a statement to shareholders according to a filing on June 26.
Occidental’s bid includes a $10 billion financing deal with Warren Buffett’s Berkshire Hathaway Inc. The deal is expected to increase Occidental’s debt to around $40 billion, according to a report by Reuters.
Emily Patsy can be reached at epatsy@hartenergy.com.
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