Transocean chairman to step down after Icahn attack

Mon May 13, 2013 3:03pm EDT
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By Braden Reddall

(Reuters) - Transocean Ltd (RIG.N: Quote) said on Monday that Chairman Michael Talbert will step down later this year, in a move that comes just days before the culmination of a fight between the offshore driller and investor Carl Icahn in which Talbert was a target.

Talbert, a director since 1994 who was also chief executive from 1994 to 2002, told the board that if re-elected at the upcoming shareholder meeting on May 17, he will step down as chairman by November and leave the board no later than the 2014 annual meeting, Transocean said.

Icahn, who owns 5.6 percent of Transocean, has opposed Talbert's re-election. The activist investor has been campaigning for a higher dividend payout for months and is calling for major changes to the Switzerland-based company's board ahead of the annual meeting.

"We find it to be utterly absurd that a Chairman facing the prospect of losing his directorship would be so brazen as to ask shareholders to return him as Chairman so that he and the Board can then pick his successor," Icahn wrote in a letter to Transocean shareholders on Monday.

Talbert's exit strategy caps a tumultuous meeting season for long-serving bosses in the energy business. On Friday, John Hess was stripped of his chairman duties at Hess Corp (HES.N: Quote), just a week after Occidental Petroleum Corp (OXY.N: Quote) Chairman Ray Irani was voted out after two decades at the top.

Icahn has gone after Transocean over "ill-advised" mergers and "unsuccessful" development strategies. Over the past five years, its shares dramatically underperformed rivals Ensco Plc (ESV.N: Quote) and Noble Corp (NE.N: Quote) - even before the 2010 Gulf of Mexico oil spill following a deadly Transocean rig accident.

Transocean grew out of a series of mergers that started with the purchase by Alabama-based Sonat Offshore Drilling of Norway's Transocean ASA in 1996. Three years later came the takeover of Sedco Forex, spun off by oil services giant Schlumberger (SLB.N: Quote), before a blockbuster deal with GlobalSantaFe in 2007 created the current industry leader.

Icahn wants the company to replace three directors, including the chairman, with his nominees John Lipinski, José Maria Alapont and Samuel Merksamer.   Continued...

Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference, held at the New York Stock Exchange, June 27, 2007. REUTERS/Chip East