In the ongoing war of words between activist investor Carl Icahn and the SandRidge Energy Board of Directors, the board is the latest to fire a salvo. It not only disputed some of Icahn’s claims but also presented evidence that the Board was correct in attempting a merger with a Colorado company that is now producing positive results.
In a filing this week with the Securities and Exchange Commission, the SandRidge Board of Directors issued a lengthy response to last week’s critical attack made by Icahn as he attempts to take control of the board.
At one point in the filing, SandRidge made it clear with a bold headline “Icahn Is Set on Seizing Control,” stating that “Icahn’s agenda is clear–it is seeking to gain control of SandRidge without paying an appropriate premium in order to preserve further upside only for itself.”
The SandRidge statement also urged shareholders not to be misled by Icahn’s “Colorful but False Rhetoric.” The board refused Icahn’s claim that there was no progress in the strategic review process, stating his representatives have been in the SandRidge data room and taken part in a management presentation on May 30.
While Icahn referred to the SandRidge board as the “Bankruptcy Board, SandRidge’s statement made it clear no member of the board served in any capacity before the company’s bankruptcy filing.
The Company went to to point out “Icahn’s Poor Track Record in the Energy Industry,” claiming he has “arguably destroyed $28 billion of shareholder value in aggregate during his involvement in his energy investments.”
The statement also claimed that after investing nearly $7.1 billion in energy companies, Icahn’s estimated loss totals nearly $540 million.
“Of Icahn’s six investments in the energy sector, it is estimated that he has lost money and presided over significant value destruction in five of the six cases,” claimed the statement. The companies identified were Cheniere, Talisman, Transocean, CVR Energy, Dynegy and Chesapeake.
It was earlier in the year when Icahn demand that the SandRidge Board terminate a planned merger with Bonanza Creek Energy based in Colorado. SandRidge said in its SEC filing that since the termination of the deal, Bonanza Creek has outperformed the XLE Benchmark and “now trades in line with and recently at a premium to our originally proposed purchase price.”
SandRidge said Bonanza Creek production is outperforming its modeled performance and new well results are exceeding “our acquisition model.”
“The Board responded to shareholder input—ultimately yielding to Icahn Capital and others to terminate the Bonanza Creek transaction—but it is only fair to note that the value thesis regarding Bonanza Creek has proven sound,” stated the company.