Occidental Petroleum Corp. said on March 13 it will implement a “poison pill” that aims to stop investors from amassing more than 15% in the oil producer, a day after activist investor Carl Icahn disclosed a nearly 10% stake.
The billionaire investor has been waging a bitter battle with Occidental’s board over its $38 billion acquisition of Anadarko Petroleum, calling it a misplaced bet based on expectations of higher oil prices.
Icahn has also repeatedly called upon Occidental to disclose if it had received any takeover offers while looking to buy Anadarko and said on March 12 he expects strong bids to emerge once U.S. crude prices recover in the near-to-medium term.
Occidental said on March 13 it will issue one right for each share outstanding at the close of March 23 and that right will be exercisable if a person or group acquires at least 15% of the company’s shares.
It will also be exercised if passive institutional investors buy 20% of the oil producer.
Icahn bought about 88.6 million shares for $2.21 billion, raising his stake in Occidental to nearly 10% from 2.53% at the end of last year, an SEC filing on March 12 showed.
Occidental’s market value has plunged to $10.6 billion as of close on March 12, less than a third of what it paid for Anadarko and its debt has ballooned to about $40 billion.
U.S crude was trading at $32.62 a barrel at 13:33 GMT on March 13, on track to lose a fifth of its value over the week as the coronavirus outbreak threatened demand and crude producers promised more supply.
The company slashed its dividend and unveiled fresh spending cuts earlier this week to cope with the crash in oil prices.
The rights plan has to be approved at the 2020 annual meeting, the company said.
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