UPDATE 1-Talisman shares drop as investors question Icahn effect

Tue Oct 8, 2013 1:10pm EDT
 
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* Second time Icahn has taken a position in Talisman

* Doubts on whether activist investor can speed change

* Share fall 1 percent in afternoon trading (Updates shares and adds background.)

By Euan Rocha and Scott Haggett

TORONTO/CALGARY, Oct 8 (Reuters) - Talisman Energy Inc shares fell on Tuesday as investors raised doubts that activist investor Carl Icahn would be able to force dramatic changes on the struggling Canadian oil producer.

Icahn disclosed a 6 percent stake in Talisman late on Monday, making him its second-largest shareholder, according to Reuters data. It is the second time Icahn has taken a position in Talisman. He acquired 4.8 million shares in 2007, when the company was facing pressure to boost its share price.

Talisman shares have risen some 11 percent since the start of the month, as rumors swirled that an activist investor was building a position in the company. In the 12 months prior, the stock sagged 10 percent, despite a restructuring and asset sale program under a new management, as profits remained weak and its North Sea operations faltered.

"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."   Continued...