Fresh from toppling SandRidge Energy Inc.’s (NYSE: SD) $746 million merger with Bonanza Creek Energy Inc. (NYSE: BCEI), activist investor Carl Icahn appears bent on torpedoing SandRidge’s leadership as well.
SandRidge and Bonanza said Dec. 28 that they would terminate the merger after it became clear SandRidge could not overcome opposition from Icahn and other investor groups. Icahn called the deal “value-destroying.”
The merger would have purchased Bonanza’s assets, including 67,000 net acres in the Denver-Julesburg (D-J) Basin’s Wattenberg Field; 11,500 in the Cotton Valley; and 15,800 barrels of oil equivalent per day. Analysts generally viewed the deal favorably and said it would add visibility to a company largely ignored by investors.
On Jan. 9, after a brief respite from the merger turmoil, Icahn sent the board a fiery letter criticizing SandRidge’s leadership and tactics and demanding a shakeup of the company’s board of directors.
Icahn appears particularly aggrieved by steps the board took to limit outsider control by capping the acquisition of SandRidge stock.
In the letter, Icahn blasted the boards’ hubris toward the company’s owners as tantamount to the “medieval belief in the divine right of kings.” Icahn also singled out CEO James Bennett’s compensation, leadership during the merger and stewardship before and after the company’s October 2016 emergence from bankruptcy.
Source: Oil & Gas Investor