Transocean reaches deal with Icahn to resolve proxy battle
(Reuters) - Transocean Ltd (RIG.N: Quote) said it reached an agreement with Carl Icahn that would see the offshore driller paying out a dividend and reducing the number of board seats, in a move that resolves a months-long proxy battle.
As per the agreement, Transocean would pay a $3 dividend, while reducing the maximum number of directors to eleven from fourteen. Icahn had previously pressed for a $4 per share dividend.
Icahn, after disclosing his 5.6 percent Transocean stake in January, has gone after the world's largest drilling contractor over "ill-advised" mergers and "unsuccessful" development strategies.
The activist investor has been campaigning for a higher payout and calling for major changes to the Switzerland-based company's board.
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.
Transocean on Monday said it would implement a Master Limited Partnership-type yield vehicle ("MLP") to provide additional financial flexibility.
The initial public offering of the MLP is expected to be completed around the middle of 2014 with a minority interest sold at that stage, the company said in a statement.
The deal will also see the re-election of Samuel Merksamer and the appointment of Vincent Intrieri to the board.