Chesapeake’s Biggest Holder May Seek Third-Party Involvement

Southeastern Asset Management Inc., the largest investor in Chesapeake Energy Corp. (CHK), filed to change its status to an activist investor so it may pursue talks with management or third parties to boost the company’s value.

Southeastern disclosed a 13.6 percent stake in Oklahoma City-based Chesapeake in a filing today with the U.S. Securities and Exchange Commission. Mason Hawkins, Southeastern’s chairman and chief executive officer, pushed to have Chesapeake CEO Aubrey McClendon replaced as chairman and to halt a perk that allowed McClendon to buy personal stakes in Chesapeake’s oil and natural-gas wells.

McClendon, the only chairman Chesapeake has had since he co-founded the company in 1989, has been criticized by investors and analysts over potential conflicts between his personal finances and corporate duties. He apologized today to investors for the “distractions” of recent weeks during a conference call.

Chesapeake fell 13 percent to $16.97 at 2:40 p.m. in New York, after earlier dropping 14 percent, the biggest intraday decline since March 2009. The stock lost 49 percent of its value in the past year.

Southeastern may wish to discuss with Chesapeake management or third parties “possible courses of action to assist in building corporate intrinsic value per share or to cause the company’s true economic value to be recognized,” the Memphis, Tennessee-based fund manager said in the filing.

Lee Harper, a Southeastern spokeswoman, didn’t immediately return a telephone message seeking comment.

Chesapeake’s shares plunged today after the second-largest U.S. gas producer posted an unexpected first-quarter loss and said it may run out of cash next year.

To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net