Carl Icahn: Gee… Occidental Petroleum is a lot like WeWork

The activist investor shames the oil company over its debt payment strategy

Occidental Petroleum took a shot from activist investor Carl Icahn in more ways from one. Icahn slashed his stake in the company and threatened to launch a proxy fight. Then, he compared the oil producer’s corporate governance to that of WeWork, the struggling office-sharing firm that canceled its IPO last month.

Icahn sent a brutal letter to the board of directors after the firm announced plans to cut capital spending. The firm will shutter half of its Permian Basin production in an effort to pay down its debt.
“Future growth has been sacrificed in favour of reducing the massive debt pile that Hollub and her board created to acquire Anadarko,” Icahn wrote in a letter. The activist refereed to CEO Vicki Hollub in his complaint.

“OXY’s corporate governance is so bad that management doesn’t even attempt to defend it,” he wrote.

Carl Icahn and His Battle with Occidental Petroleum

Icahn has accelerated a very public lawsuit and battle with Occidental over its $55 billion purchase of Anadarko. The money manager has long argued that the deal was “fundamentally misguided and hugely overpriced.”

Icahn cut his stake in Occidental Petroleum by 10 million shares. That dropped his outstanding stake from 3.7% to 2.4%. Icahn slashed his stake to $900 million so that he wouldn’t expose more than $1 billion to an executive team that “in my view, have gambled the company to further their own agendas.”

Icahn wants to boot four board members from the company, according to filings with the SEC. He is currently seeking an opportunity to get shareholder approval before he takes that action. In addition, both sides await a final decision from a court case in September.

Icahn concluded his letter by comparing Occidental to a name that hasn’t generated much positive press in recent weeks. He warned that Occidental could one day find itself in the thesaurus as a term to describe a “massive corporate disaster.” He drew up the names WeWork and Enron as potential comparisons.

“Sunlight is the best disinfectant,” he wrote. “We agree and believe the OxyDarko Disaster desperately needs some sunshine.”

Related: Carl Icahn is Relocating his Office to Miami

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