Billionaire investor Carl Icahn called on Transocean Ltd. to issue a $4-a-share dividend and said he will propose the dividend at the next meeting if the board doesn’t act.
Icahn, who holds a 5.61 percent stake in the company, has held talks with Transocean’s management and intends to have further discussions including about the possible addition of new board members, according to a filing today with the U.S. Securities and Exchange Commission.
Transocean owned the Deepwater Horizon rig that exploded in April 2010 in the Gulf of Mexico, killing 11 workers and leading to the largest offshore oil spill in U.S. history. The company said in February 2012 its board wouldn’t propose a dividend at its 2012 annual shareholder meeting. Transocean previously had a quarterly dividend of 79 cents a share.
“I don’t have any objection to someone trying to get them to pay a dividend, but $4 a share sounds a bit too high to me,” said Philip Weiss, an analyst for Argus Research. “I’d rather see them take a portion of that money and use it to build more rigs and expand the business.” Weiss rates Transocean a buy and owns the shares.
The company said earlier this month that Icahn and his affiliates had bought a stake in Transocean and sought regulators’ permission to own more than 3 percent. That announcement came after Transocean agreed to pay about $1.4 billion related to the 2010 Gulf spill.
Transocean had about $6 billion of cash and near-cash items at the end of September, according to data compiled by Bloomberg.
“We will review Mr. Icahn’s filing carefully and respond in due course,” Brian Maddox, a spokesman for Transocean at FTI Consulting, said in an e-mail.
Yesterday, CVR Energy Inc. announced a new quarterly dividend policy and a special dividend of $5.50 a share. Icahn took over the oil refiner and fertilizer maker last year and owns about 82 percent of that company’s shares.
Transocean climbed 2.9 percent to $58.40 at 5:52 p.m. in New York.