Icahn's Transocean (RIG) Stake Has Management Shaking In Boots

January 14, 2013 9:56 AM EST
This morning it was learned that rabble rouser Carl Icahn has built a significant stake in deepwater driller, Transocean Ltd. (NYSE: RIG). The revelation comes just weeks after Transocean announced a $1.4 billion Deeepwater Horizon settlement with the department of justice, eliminating a major overhang.

Transocean's market cap is over $19 billion, so it is not an easy target if Icahn is planning to gain management control. However, Icahn has taken a 1.56 percent stake in the drilling company, making him one of the top shareholders, and is seeking approval to potentially acquire voting securities of Transocean in an amount exceeding the $682.1 million Hart-Scott-Rodino threshold, but less than that Act's threshold of 25 percent of the outstanding voting securities.

When he sets his mind to driving change in a public company, investors stand up and take notice, often siding with the tycoon throughout the process. Last year Icahn was successful in orchestrating change and Chesapeake Energy Corp. (NYSE: CHK), CVR Energy Inc. (NYSE: CVI) and Forest Laboratories Inc. (NYSE: FRX). He is also making inroads at Netflix (Nasdaq: NFLX). Icahn unsuccessfully bid for Oshkosh (NYSE: OSK), Commercial Metals and The Greenbrier Companies, Inc. (NYSE: GBX) over the past year.

Overall the market views Icahn's stake in Transocean as a positive for the stock. For the current management and board of directors, it is probably a much different story.

Shares of Transocean last traded at $55.55, up 2.7%.

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