Occidental Petroleum adopts a limited duration stockholder rights plan - a poison pill - as day after Carl Icahn said he had acquired a nearly 10% stake and promised to shake up the company's board.
If approved, the rights plan would be exercisable if an investor amasses a 15% stake in the company.
"We adopted the Rights Agreement to protect stockholders from efforts to capitalize on recent market volatility and macroeconomic conditions to gain control of the company without paying all stockholders an appropriate premium for that control," incoming Chairman Jack Moore says.
13 replies (most recent on top)
Does anyone think that Oxy would consider an offer by another Oil and Gas major if approached to avoid Icahn taking over?
Should have been called “ Executive Rights Plan.” These people have no shame.
Sadly, potential acquirers probably don't want to pay for the preferred for another 9 years. It is a bit of a poison pill in and of itself.
Post ID: @gtd+13XdeASf
Icahn did not drive the stock down to $12 a share, I don’t see how this is a good deal for the stockholder? It’s a way to avoid having the company sold and getting rid of the existing management. Who will pay $55 a share for Oxy, no one?
It potentially would lead into bankruptcy if the company becomes insolvent. The company should be sold as soon as possible to a Chevron or XoM. That is what would benefit the shareholders .
I imagine business schools will highlight this as one of the worse deals ever. It would be the worst, but that honor still goes to AOL/Time Warner......destroying $200B in shareholder value.
Have they no shame??? No shame at all??? Disgusting
Thanks again for explaining. I think the best bet would be to keep the shares I have and hopefully Icahn will move the stock up. If this EC team and Board try to pay Icahn off then they really are screwing over the shareholders. In the end Icahn is the one that told us what was going to happen almost exactly. I feel like I am going to lose my job either way and I would rather have a chance of driving up the stock. I made the mistake in believing the Oxy brass the first time. From the day we closed it has been downhill. I also agree they will line their pockets just like the Anadarko EC did, but in our case we will not be protected. At least the EC at Anadarko protected their workers. I bet the APC left wish they were out of here with some type package. We have not heard a peep from our leaders since all this went down. When they cut the dividend they lost me. I feel like Vicky lied to us shareholders about keeping the dividend, and she should be ashamed of herself. That dividend cut took the food off the table for some. She had to of known it was a possibility, but she continued to say the dividend was save. Icahn knew it from the start and even pointed it out in public. She and some of her EC and the board need to go with no financial reward for running the company in the ground. She has shown no foresight, and those jobs a person should be able to see evert thing as a possibility. If the deal dies with 30.00 oil don’t do it. I just hope the shareholders take the time to educate themselves and vote.
Poison pills are the tools of horrible executives and boards. The press release uses deceptive terms to sugar coat it....."Stockholder Rights Plan". Please! What stockholder cares if they have 1 share @ $10 or 5 shares @ $2?
The only thing poison pills protect are the entrenched managers. Forcing future owners to negotiate with the board/executives. Odds are, those negotiations will be more focused on executive severances or positions in the future company. Making the company even less attractive to prospective owners.
If stockholders think $10 is undervaluing Oxy, they can simply just not sale their shares. Why stop an Icahn from buying 15% or more of the company if he wants, if he can't find any sellers at current prices......he will just have to bid the stock up until he finds enough sellers.
Thanks for the explanation and I need to read a little more before voting. Part of me thinks it could be diluting the shares I have now by adding more shares. Not so sure that is a good idea. I think a change of management might be what we need, but Icahn will just sale us off piece by piece, and employees will not get the same packages as before in my opinion. Also, would the Anadarko COC be affected by a hostile takeover like Icahn is trying to do. Employees need to educate themselves to vote right because this is going to affect jobs, health insurance, etc. I hope Vicky and the board put in a COC for the employees like Anadarko did, but from what I have seen there is nothing to protect the employee. Those of us with stock need to make the right decision. Any help on understanding this process would be appreciated.
Send Oscar Brown to jail with her... He lead this sh– show too.
My understanding of how this "poison" pill works is that holders of this special right will receive, "that number of shares of common stock having a market value of two times the exercise price of $55.00 per right". So, that tells me that once someone owns 15%, holders of the rights get shares of common stock equal to stock price divided by $110.
So, if stock is @ $20/share you would receive 5.5 shares of common stock.
The poison is that it massively dilutes shares and that person no longer owns 15% of the company.
This is good for the stockholders which I am one, and also an employee. If laid off I can deal with that because that is the oil industry. To get 55.00 a share would allow me to get my retirement back. I am not exactly sure how it works, but any protection is better than giving away my shares to Icahn for 10-15 dollars. You will never get back your investment if he buys up shares at the current discount. In this case I say thanks to the EC and board. Icahn is not just screwing the top folks, but all of us that have stock.
Vicki should be heading to jail. Unbelievable. B/w oxy and apc, almost $100b gone. Now they try to manipulate it so not to be taken out?