Activist investor Carl Icahn has taken a stake of more than 3% in the offshore driller Transocean Ltd., the company disclosed late Sunday.
Mr. Icahn has bought 1.6% of the company's 359 million shares outstanding and controls another 1.7% in part through options, the company said in a statement and regulatory filings.
He told the company he is planning to acquire more than $682 million of stock in total, which analysts say is equal to at least 12.6 million total shares, or 3.4% of Transocean's outstanding shares. That would make him the second largest shareholder in the company, which is based in Zug, Switzerland, after Capital Research and Management Co., which owns more than 5%.
Transocean's shares rose as much as 4% Monday morning to over $56 a share in trading on the New York Stock Exchange, pushing the company's market capitalization above $20 billion.
Mr. Icahn's intentions for Transocean aren't completely clear since the company has largely resolved a number of major issues that were weighing on its performance, said analysts at Tudor Pickering Holt & Co. It sold off its fleet of older shallow-water drilling rigs late last year and, earlier this month, settled all civil and criminal issues with the Federal government related to the 2010 Deepwater Horizon accident for $1.4 billion.
Mr. Icahn didn't immediately respond to a message left with his office.
Bernstein Research said it expects Mr. Icahn will likely push for more cost-cutting efforts at the company, including the possible sale of older deep-water drilling rigs, as well as for reinstatement of the dividend, which the company eliminated last February.
In a statement, Transocean said it is continuing to improve its operational and financial performance, including plans to add four new deep-water rigs to its fleet. The company said it "is very interested in the views and opinions of its shareholders and looks forward to engaging in dialogue with the firm."
Mr. Icahn has been active in energy investments in the last year, taking stakes in companies such as refiner CVR Energy Inc. and Chesapeake Energy Corp., the second-largest natural gas producer in the U.S. His Chesapeake investment helped spur major corporate-governance changes at the company, including the replacement of a majority of the board.
Copyright (c) 2012 Dow Jones & Company, Inc.
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