In my daily slog through vast amounts of email, I came across an interesting tidbit: Carl Icahn has filed a schedule 13-D revealing a 5.61% stake in Transocean, mostly via call options. According to the US Security and Exchange Commission (SEC), a schedule 13-D is commonly referred to as a “beneficial ownership report.” “The term ‘beneficial owner’ is defined under SEC rules,” the SEC’s website states. “It includes any person who directly or indirectly shares voting power or investment power (the power to sell the security).” As the wife of a man who works for ConocoPhillips and is from the Phillips side of the equation, I can say that I find nothing particularly “beneficial” about Icahn’s attempts to “restructure” industries. A 1985 Chicago Tribune article referred to Icahn as “one of the most feared corporate pirates.” That article goes on to note that Icahn said that if his ilk had attacked America’s steel companies in the 1960s, “there wouldn’t be a Rust Belt today.” I’m not sure what he thought he could do to improve the oil industry, but try he did. For those of us who lived in Bartlesville, Okla., in 1984 and 1985, it was truly a terrifying time. First T. Boone Pickens took a stab at Phillips, and less than two months after he dropped his bid, Icahn stepped in. Icahn’s purchase of the company would no doubt have destroyed not only it but the economy of Bartlesville as well. Luckily Phillips was able to conduct its own restructuring plan and ward the raider off. Thousands were laid off or took early retirement as a result of the twin terrors. Icahn swiftly moved his focus to TWA, which he took over and then dismantled to repay the debt he used to purchase the company, according to St. Louis Magazine. In a delightful analogy, Elaine X. Grant described the airline’s demise in a 2005: “TWA was the Marilyn Monroe of the airlines: an American icon done in by powerful men who wanted a piece of its magic. Glamorous, tragic, gone before its time. And even though TWA’s demise didn’t involve pills or rumors of mob involvement, it was every bit as controversial as Marilyn’s suicide. Ask any ex-staffer what went wrong with the airline, and you’ll get one answer: Carl Icahn, the corporate raider who took over TWA in 1985 and systematically stripped it of its assets.” Bill Herbert of Simmons & Co. notes that Icahn’s current plan for Transocean includes a minimum dividend of US $4 per share, well within Transocean’s cash stockpile. Most likely Icahn’s current focus is on his ongoing battles with Netflix and Herbalife. But Transocean shareholders – and employees – should keep a close eye on this developing situation. Contact the author, Rhonda Duey, at email@example.com.
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