The fight between SandRidge Energy Inc. and activist investor Carl Icahn went another round, with the company's leadership sending a letter urging shareholders asking them to reject Icahn's slate of director nominees after Icahn said the board incumbents would make "poor decisions."
SandRidge previously agreed to expand the board to seat two directors of Icahn's choosing, but Icahn continued his efforts in recent days to take full control of the board. He said in a presentation to shareholders May 25 that he had nominated the full slate of candidates to replace the current board because they are likely to make "poor decisions on behalf of stockholders" during the company's evaluation of strategic alternatives, including a possible sale.
In his letter to shareholders May 29, SandRidge CEO William Griffin urged votes for board members Sylvia Barnes, Kenneth Beer, Michael Bennett and David Kornder, as well as himself, at the annual shareholders meeting June 19. He also asked shareholders to vote for two Icahn nominees among the four who are not what he termed "Icahn's Insiders": John Lipinski, Randolph Read, Bob Alexander and Nancy Dunlap.
The CEO went on to accuse Icahn of trying to short-circuit potential deals for the company while positioning himself as the sole buyer. "Icahn is seeking to gain control of SandRidge without paying an appropriate premium or participating in a competitive process," Griffin said. "Having nominated for election a full slate of seven candidates, including two who work directly for Icahn and one former employee, to sidestep the ongoing impartial process, Icahn is not content to compete fairly with other potential counterparties in the thorough and even-handed process being conducted by the SandRidge board."
SandRidge has announced publicly that it is open to a sale of the company, but Griffin said he does not believe that a transaction will occur before the annual meeting. The current group of directors is the most likely to obtain fair market value in any deal, he said.
"Four of our five directors have successfully led many public company sales processes as board directors, executive team members, or as a financial advisor. A board led by our nominees ensures we have the independence, experience, skills and knowledge necessary to lead the company forward with an unrelenting focus on continuous improvement of our operations and maximizing value," he said.
Griffin's statements were in stark contrast to Icahn's May 25 comments, in which he accused the current board of "aggressive disregard for shareholder rights, consistent missteps [and a] lack of a coherent strategy."
"We've nominated a capable slate of directors which will represent the best interests of all shareholders," he said. Icahn is SandRidge's largest investor, holding 13.6% of outstanding company stock, and recently enlisted former SandRidge President and COO Matthew Grubb to serve as a consultant to review a possible transaction.
