Icahn ignites Talisman stock, but longer-term doubts linger

Tue Oct 8, 2013 3:19pm EDT
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By Euan Rocha and Scott Haggett

TORONTO/CALGARY (Reuters) - Talisman Energy Inc TLM.TO shares rallied in trading before the bell on Tuesday on news that Carl Icahn has built a stake in the company, but doubts remain about whether the billionaire investor will be able to force dramatic changes.

Investors and analysts see Icahn's involvement in Talisman breathing life into the stock in the short-term, but many are wary, as the company has been working through a restructuring process under new management for over a year now and the results so far have been mixed at best.

"As a long-suffering shareholder, we are happy to see some price realization right now, but we are wary as the stock has already moved quite a bit in the last couple of weeks given the speculation around activist involvement," said Ryan Bushell a portfolio manager at Leon Frazer, which owns about 1.55 million Talisman shares, according to Thomson Reuters data.

"For the long term, whether this will result in taking the company where it needs to go - that for me is still very much in question," said Bushell.

Icahn disclosed late on Monday that he owns a 6 percent stake in Talisman. The company's shares were up 6.5 percent at $13.58 in trading before the bell in New York on Tuesday.

The shares have risen 2 percent over the past 12 months, but much of the rise has come since the start of October, when rumors began to swirl that an activist investor was buying the stock.

Icahn, 77, said in a filing with the U.S. Securities and Exchange Commission that he intended to talk with Talisman's management to discuss strategic alternatives for the company, including asset sales or restructuring. He may also seek a board seat, according to the filing.

But many analysts noted that Talisman has already been working on a restructuring and asset sales process for months.   Continued...

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