by Christopher Freeburn | November 11, 2013 10:13 am
Shares of Transocean (RIG) climbed more than 3% after the Switzerland-based offshore rig contractor said it will streamline operations and offer a higher dividend to shareholders in a deal with Carl Icahn.
The company will increase its dividend from a previously-proposed $2.24 a share to $3 and will implement cost reductions designed to boost its margin by $800 million. It will also reduce its number of directors from 14 to 11 and support the election of two directors nominated by Icahn to the board, Bloomberg noted.
Icahn, Transocean’s third-largest shareholder, had been pressuring the company to raise its dividend to $4 a share. The company suspended dividends in 2012 in the wake of the sinking of the Deepwater Horizon drilling platform in the Gulf of Mexico.
In May, Transocean shareholder voted down Icahn’s demand for a $4 dividend payout. The higher dividend that the company and Icahn have now agreed to will be funded by additional paid-in capital.
Icahn recent took a stake in technology giant Apple (AAPL) and is pressuring its CEO to increase the size of its planned share buyback.
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