Icahn presses for higher dividend despite Transocean plan

Mon Mar 4, 2013 5:53pm EST
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(Reuters) - Activist investor Carl Icahn affirmed plans to propose a $4.00 per share dividend at Transocean Ltd's (RIG.N: Quote) RIGN.VX annual meeting, a day after the world's largest drilling contractor said it will restart payouts at a lower rate.

Icahn, who has been campaigning for a higher payout for over a month, said he would propose the dividend he had suggested in January, at Transocean's annual meeting on May 17, according to a filing with the U.S. Securities and Exchange Commission on Monday.

Transocean's latest plan "further highlights a long track record of weak capital allocation strategy," Icahn said in the filing.

The board has recommended that shareholders approve a $2.24 per share dividend. The total payout would be about $800 million, the company said on Sunday.

After paying a dividend in 2011, its first in nine years, Transocean last year abandoned payouts that totaled $3.16 per share annually, to maintain a strong balance sheet and investment-grade rating on its debt.

On Monday, Chief Financial Officer Esa Ikaheimonen said it would be a stretch for Transocean to launch an initial public offering of a master limited partnership of some of its rigs in 2013 because the process would take about a year to complete.

But he added that Transocean had attractive assets for such a transaction, particularly among its Gulf of Mexico ultra-deepwater fleet.

"The market size is limited so I think up to three ultra-deepwater rigs could potentially be an IPO, and nothing much more than that," Ikaheimonen said in his first quarterly conference call since he was hired from Seadrill (SDRL.OL: Quote) last year.

"You will have to wait and see and we will keep you up to date as to when we make progress."   Continued...