Transocean Ltd. will boost its dividend and cut costs as part of an agreement with Carl Icahn, months after the world’s largest offshore rig contractor won a shareholder battle with the billionaire investor.
Transocean shareholders, who rejected Icahn’s proposed $4-a-share dividend in May, will have the chance to vote on a $3 payout next year, up from the current $2.24 level, according to a statement Monday from the Switzerland-based company.
Icahn, Transocean’s third-largest shareholder, began pushing for changes at the company in January, saying it had been involved in “ill-advised mergers, employed unsuccessful development strategies and squandered the substantial cash flow.” Shareholders in May largely sided with the company, rejecting the higher dividend and two of Icahn’s three board nominees. As part of Monday’s agreement, another Icahn nominee, Vincent Intrieri, will be part of the company’s proposed slate for a smaller 11-member board next year.
“After fighting Icahn tooth and nail this spring and largely winning, Transocean has now curiously yielded to additional demands,” Scott Gruber, an analyst at Sanford C. Bernstein & Co., wrote Monday
in a note to investors. “Clearly the company feared another battle in 2014.”
