Activist investor Carl Icahn is trying to torpedo a $38 billion merger between Occidental Petroleum Corp. and Anadarko Petroleum Corp., labeling the deal as “fundamentally misguided and hugely overpriced.”
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In a lawsuit filed on Thursday in Delaware court, Icahn revealed he owns $1.6 billion in Occidental stock. The billionaire is seeking records related to the transaction and is considering joining with other shareholders to try to force a revamp of the Houston-based company’s board of directors.
The lawsuit raises questions of Occidental CEO Vicki Hollub’s ability to lead the company through such a high-profile merger, as well as her decision to sell Anadarko’s $8.8 billion assets in Africa to French firm Total S.A to reduce its debt.
"From all appearances it seems that Occidental sold these assets in a quickly arranged fire sale before it even owned them,” the suit reads.
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The Icahn lawsuit is the latest saga for the deal. Earlier this month, Chevron backed off its own $33 billion takeover attempt of Anadarko after Occidental submitted a superior bid.
Famed investor Warren Buffett’s Berkshire Hathaway provided a $10 billion preferred stock investment to assist Occidental in its quest to top Chevron, a deal that is also discussed in Icahn’s lawsuit.
“A ninety-minute deal ‘negotiation’ with one of history’s canniest investors, is no place to gain M&A experience -- at least if you care about protecting your stockholders," the suit reads.
In an emailed statement, an Occidental spokesperson argued the Anadarko acquisition would “deliver compelling value and returns to the shareholders of both companies.”
“We look forward to completing the transaction in the coming months,” they said, adding that the company would respond to the request for documents in “due course.”
A spokesperson for Anadarko did not immediately respond to request for comment.