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TPG-Axon’s Singh Says SandRidge Management Not Trusted

Dinakar Singh, founder of $4 billion hedge fund TPG-Axon Capital Management LP, increased the firm’s stake in SandRidge Energy Inc. (SD)’s and said its management isn’t trusted by investors.

“There is tremendous value” in SandRidge, Singh said today in an interview on Bloomberg Television’s “Market Makers” program with Stephanie Ruhle and Pimm Fox. “Management is not trusted by the street,” said Singh, a former Goldman Sachs Group Inc. (GS) partner who co-founded New York-based TPG Axon in 2004.

TPG-Axon reported it owns 6.2 percent of SandRidge, up from 4.7 percent on Thursday, according to a filing.

SandRidge Chief Executive Officer Tom Ward said he’s a major shareholder in the company, too, and also interested in increasing its value.

Ward defended SandRidge’s strategy, including a decision to sell its oil property in the Permian Basin. Selling the field will allow SandRidge to concentrate on the Mississippian Lime Field in Oklahoma and Kansas, where it can earn a higher rate of return, Ward said. Analysts have said the Mississippian is worth less because it produces more natural gas.

“Whether we produce oil, natural gas or ice cream -- if we can make 50 percent rates of return, that’s what we want to do,” Ward said.

Ward said he plans to meet with Singh.

In a Nov. 8 letter to Oklahoma City-based SandRidge’s board, Singh recommended replacing Ward and selling the company after a “disastrous” performance. SandRidge has declined 79 percent since it began trading in 2007.

SandRidge has overpaid its CEO and is an “insatiable spender” with an incoherent strategy, Singh wrote in the letter. SandRidge should replace some board members with independent directors and representatives of large shareholders.

SandRidge rose 3.9 percent to close at $5.60 in New York.

To contact the reporters on this story: Saijel Kishan in New York at skishan@bloomberg.net; Mike Lee in Dallas at mlee326@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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