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Just days after trashing hedge fund manager Bill Ackman, activist investor Carl Icahn is back in the news on Monday. This time the so-called “bully” has his elbow in the chest of offshore oil driller, Transocean Ltd. (NYSE: RIG). Armed with his lawyers, Icahn intends to twist the company’s arm in order to get it to pay a $4 dividend to investors.
For current Transocean shareholders, bully or not, Icahn’s maneuvers are seen as investor friendly, especially considering Transocean’s current dividend of precisely zero. Last year Transocean’s board eliminated the dividend, which at the time was a $1 billion.
Last year investors had little hope of mounting a successful challenge. With Icahn on board, that no longer appears to be the case. In a recent 13D filing, Icahn boosted his stake in Transocean to 5.61 percent, making him the largest shareholder. Under Swiss law a shareholder has the right to propose a dividend at a company’s annual meeting, and if a majority of shareholders support the proposal, the dividend is declared, whether or not the company’s board supports the proposal. It is both a tricky and brilliant maneuver the activist.
If Icahn is successful, the $4 annual dividend would be the largest in Transocean’s spotty dividend history.
Shares of Transocean last traded at $58.15, up 2.5 percent.
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