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Thanks to Icahn, Transocean to Pay $1.1B in Dividends

It will also pare costs by $800 million


noble deepwater oil drilling 630Shares 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.

Should I Buy RIG Stock? 3 Pros, 3 Cons
Should I Buy RIG Stock? 3 Pros, 3 Cons

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.

Article printed from InvestorPlace Media,

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