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

State, society, and the narrow corridor to liberty

Joseph Corr

2023-09-28 08:26:00 Thursday ET

State, society, and the narrow corridor to liberty

Daron Acemoglu and James Robinson show a constant economic tussle between society and the state in the hot pursuit of liberty. Daron Acemoglu and James R

+See More

Citron Research short-sellers initiate a class-action lawsuit against Tesla and its executive chairman Elon Musk.

Monica McNeil

2018-09-05 08:34:00 Wednesday ET

Citron Research short-sellers initiate a class-action lawsuit against Tesla and its executive chairman Elon Musk.

Citron Research short-sellers initiate a class-action lawsuit against Tesla and its executive chairman Elon Musk because he might have deliberately orchestr

+See More

Bill Gates and Warren Buffett shared their best business decisions in a 1998 panel discussion.

Laura Hermes

2017-11-13 07:42:00 Monday ET

Bill Gates and Warren Buffett shared their best business decisions in a 1998 panel discussion.

Top 2 wealthiest men Bill Gates and Warren Buffett shared their best business decisions in a 1998 panel discussion with students at the University of Washin

+See More

President Trump escalates the current Sino-American trade war by imposing 25% tariffs on $200 billion Chinese imports.

Rose Prince

2018-08-03 07:33:00 Friday ET

President Trump escalates the current Sino-American trade war by imposing 25% tariffs on $200 billion Chinese imports.

President Trump escalates the current Sino-American trade war by imposing 25% tariffs on $200 billion Chinese imports. These tariffs encompass chemical prod

+See More

Financial institutions benefit from higher equity risk premiums and interest rate spreads.

Charlene Vos

2017-04-01 06:40:00 Saturday ET

Financial institutions benefit from higher equity risk premiums and interest rate spreads.

With the current interest rate hike, large banks and insurance companies are likely to benefit from higher equity risk premiums and interest rate spreads.

+See More

Internal capital markets and financial constraints

Charlene Vos

2022-10-15 09:34:00 Saturday ET

Internal capital markets and financial constraints

Internal capital markets and financial constraints Duchin (JF 2010) empirically finds that multidivisional firms with robust internal capital markets ret

+See More