Transocean chairman voted out, Icahn dividend plan rejected

Fri May 17, 2013 5:00pm EDT
 
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By Alice Baghdjian

ZUG, Switzerland (Reuters) - Transocean Ltd (RIG.N: Quote) shareholders voted out Chairman Michael Talbert at the annual meeting on Friday and backed a nominee of activist investor Carl Icahn to replace him on the board of the world's largest offshore drilling contractor.

But shareholders rejected Icahn's proposed $4-per-share dividend and opted instead for the board-supported payout of $2.24 per share, the Switzerland-based company said.

Transocean shares closed down 1.3 percent to $54.03 on the New York Stock Exchange. The Swiss shares RIGN.VX closed 1.4 percent higher.

Icahn, after disclosing his 5.6 percent Transocean stake in January, campaigned to shake up the board and extract a higher dividend that Transocean called "unsustainable," while offering the $2.24 per share in response.

Icahn and Transocean spent the past few months making their cases to investors by attacking the others' director nominees and strategic plans. Transocean viewed the near-80 percent shareholder support for its dividend, and the backing for its two directors up for re-election besides Talbert, as a vote in its favor.

"Their approval of the company's dividend and board nominees is an endorsement of our balanced approach to value creation which includes maintaining a flexible balance sheet characterized by an investment grade rating on our debt; making disciplined, high-return investments in the business; and returning excess capital to our shareholders," Transocean said.

Transocean introduced its first regular dividend in nine years in 2011, but decided to halt it while working through the prolonged legal process to determine liability for the 2010 Gulf of Mexico spill, which involved one of its rigs.

Icahn's dividend proposal received the support of 35 percent of the shareholders.   Continued...