Carl Icahn mulls over steps to shake up the board of SandRidge Energy after it adopts a counter poison pill.

Jacob Miramar

2017-11-29 07:42:00 Wed ET

The octogenarian billionaire and activist investor Carl Icahn mulls over steps to shake up the board of SandRidge Energy after the oil-and-gas company adopts a poison pill that aims to prevent him from scooping up more shares.

Icahn became the company's largest shareholder after he personally disclosed a 13.5% equity stake in SandRidge in November 2017. He has taken issue with the board's strategic plan to buy Bonanza Creek Energy for $750 million in cash and stock. From Icahn's perspective, this irrational deal demonstrates executive exuberance and overvaluation that would ultimately erode shareholder value.

In response, SandRidge introduces the poison pill in order to stop blockholders such as Carl Icahn and Fir Tree Partners from buying more equity stakes above the 10% threshold. Fir Tree has complained that the Bonanza deal would depart substantially from SandRidge's 2016 exit from bankruptcy because the current bid is way too high and so makes little business sense. In addition to this highly controversial poison pill, SandRidge's directors may or may not have breached any triads of fiduciary duty (good faith, loyalty, and due care) in a way that would be commensurate with the business judgment rule.

Although it is difficult to anticipate how the poison pill and its concomitant board fight will unravel over time, Icahn's race toward the top can be long and arduous. Time will tell whether his board battle proves worthy and enhances sustainable shareholder wealth creation.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Fed's new chairman Jerome Powell testifies before Congress for the first time.

Rose Prince

2018-02-27 09:35:00 Tuesday ET

Fed's new chairman Jerome Powell testifies before Congress for the first time.

Fed's new chairman Jerome Powell testifies before Congress for the first time. He vows to prevent price instability for U.S. consumers, firms, and finan

+See More

Apple and Samsung are the archrivals for the title of the world's top smart phone maker.

Olivia London

2018-06-25 12:43:00 Monday ET

Apple and Samsung are the archrivals for the title of the world's top smart phone maker.

Apple and Samsung are the archrivals for the title of the world's top smart phone maker. The recent patent lawsuit settlement between Apple and Samsung

+See More

President Trump nominates Jerome Powell to be the new Federal Reserve chairman.

Fiona Sydney

2017-10-03 18:39:00 Tuesday ET

President Trump nominates Jerome Powell to be the new Federal Reserve chairman.

President Trump has nominated Jerome Powell to run the Federal Reserve once Fed Chair Janet Yellen's current term expires in February 2018. Trump's

+See More

Clayton Christensen defines the core dilemma of corporate innovation with sustainable and disruptive advances.

Daisy Harvey

2020-04-17 07:23:00 Friday ET

Clayton Christensen defines the core dilemma of corporate innovation with sustainable and disruptive advances.

Clayton Christensen defines and delves into the core dilemma of corporate innovation with sustainable and disruptive advances. Clayton Christensen (2000)

+See More

President Trump withdraws America from the Iran nuclear agreement and revives economic sanctions on Iran for better negotiations.

Chanel Holden

2018-05-06 07:30:00 Sunday ET

President Trump withdraws America from the Iran nuclear agreement and revives economic sanctions on Iran for better negotiations.

President Trump withdraws America from the Iran nuclear agreement and revives economic sanctions on Iran for better negotiations as western allies Britain,

+See More

Many successful business organizations develop their distinctive capabilities and unique value propositions for strategic reasons.

Jacob Miramar

2020-09-17 12:28:00 Thursday ET

Many successful business organizations develop their distinctive capabilities and unique value propositions for strategic reasons.

Many successful business organizations develop their distinctive capabilities and unique value propositions for strategic reasons. Paul Leinwand and Cesa

+See More