Carl Icahn sells a third of his shares in Occidental Petroleum

In an open letter letter to shareholders, activist investor Carl Icahn, who has been waging a bitter battle against Occidental Petroleum Corp’s $38 billion acquisition of Anadarko Petroleum, disclosed, he has cut his holdings in the company by nearly a third.

Icahn said, he has opposed the deal since it is “hugely overpriced” and that it is a misplaced bet with the company gambling on a rise of oil prices. He has urged Occidental’s board to put the company on the market.

Having sold 10 million shares he now holds 23 million shares valued around $900 million, he said. As of May 30, he had a $1.6 billion stake in Occidental.

In August 2019, Occidental had acquired Anadarko, a rival, for $38 billion despite investors opposing the deal; the board did not go for a shareholder’s vote for the acquisition.

Occidental did not immediately respond to a request for comment.

Earlier this week, while releasing its third quarter results, Occidental had disclosed that it plans on slashing spending in 2020 by 40% and cut back on production goals in order to meet dividend and debt payments.

Icahn wants the company to accelerate assets sales, and wants to replace the board. He has taken the company to court and is seeking documents related to the deal.

In an interview on Friday, Icahn said, replacing the company’s leadership would cause its value to “meaningfully increase”.

Following the report of its acquisition of Anadarko, Occidental has lost $21 billion in market capitalization, said Icahn in the letter. He plans a proxy fight against the board.

According to a letter to a judge earlier this week, Icahn wants to know, “whether the actions of the directors and management were just serious mistakes or whether they represented knowing intentional breaches of fiduciary duty similar to those seen with Enron, Worldcom and other failed companies.”

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