(Bloomberg) -- Carl Icahn said he may wage a proxy fight for board seats at SandRidge Energy Inc. after the natural gas driller adopted a poison pill provision in response to the billionaire investor's opposition to its purchase of Bonanza Creek Energy Inc.
SandRidge adopted a short-term holder rights plan on Nov. 27 set to trigger only if a person or group exceeds 10 percent of stock ownership. Icahn and his associates disclosed a 13.5 percent stake in the Oklahoma City-based explorer last week, and said they opposed the $736 million Bonanza deal.
Icahn said he was considering options including calling a special meeting of shareholders to vote on the transaction or remove directors. He also threatened legal action if SandRidge endorses the poison pill or tries to keep him from communicating with other investors.
“In direct response to this strong shareholder opposition to the proposed acquisition, you adopted a poison pill that is a complete travesty and represents a new low in corporate governance,” Icahn said in a letter to SandRidge's board on Thursday.
SandRidge rose 3.9 percent to $18.82 at 2:30 p.m. in New York trading. Denver-based Bonanza was up 0.5 percent to $27.90.
“Our independent board thoroughly evaluated and unanimously supports the Bonanza Creek transaction,” SandRidge said in an emailed statement. “We look forward to filing our proxy materials before year end, which will give shareholders the ability to fully review the merits of the transaction.”
In his letter, Icahn targeted SandRidge's Chief Executive Officer James Bennett for “massive value destruction,” citing acquisitions, a bankruptcy filing, a $90 million payout to the former CEO, and for taking over $50 million in compensation himself.
“First you promised shareholders that they would have the right to vote on whether they wanted to be diluted by the insane Bonanza acquisition,” Icahn wrote. “Now you have decided in your infinite wisdom that only you should be allowed to communicate with shareholders regarding the transaction.”
To contact the reporters on this story: Scott Deveau in New York at sdeveau2@bloomberg.net, Alex Nussbaum in New York at anussbaum1@bloomberg.net.
To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net, Elizabeth Fournier at efournier5@bloomberg.net, Joe Carroll
©2017 Bloomberg L.P.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
