Transocean board opposed to Icahn proposals

The board of Zug, Switzerland-based, offshore rig contractor, Transocean Ltd, has asked investors to vote against the dividend proposal of billionaire investor Carl Icahn his three director nominees.

''The board believes the dividend proposed by Mr Icahn would adversely affect the company's ability to operate and compete effectively in a cyclical and capital-intensive industry,'' Transocean said today in a statement. ''The election of Mr. Icahn's candidates -- who are hand-picked to pursue his potentially damaging short-term agenda -- is not in the best interest of the company and all of its stakeholders.''

Icahn, the largest shareholder in the Vernier, Switzerland- based company, called on 7 March for the addition of John Lipinski, Jose Maria Alapont and Samuel Merksamer to the board. He also plans to ask investors at the annual meeting on 17 May to vote in favour of a $4-a-share annual dividend, which he first proposed in January.

The company said on 4 March that the board would recommend reinstating its dividend at $2.24 and boosting debt repayment. Defending its 13 board members, it called Icahn's plan ''overly aggressive.''

The comments come yesterday as the first recommendations from the board on Icahn's proposals, which though declined making a recommendation to shareholders regarding his proposal to do away with staggered terms for directors.

The rig operator in mid-January had revealed in a regulatory filing that Icahn and some of his affiliates held a minority stake of in the company, and later in January acquired additional stake in the company to gain the largest shareholding with a reported 5.6 per cent stake.

"Following its review and in light of these proposals, the Board believes Mr. Icahn is pursuing a highly flawed agenda focused exclusively on potentially generating temporary returns at the expense of the company's ability to operate successfully and create sustainable value over the long-term," Transocean said in a statement.

Under Swiss law, shareholders had the right to propose a dividend at a company's annual meeting and in the event of a majority of shareholders supporting the proposal, the dividend was declared, irrespective of the support of the company's board or otherwise. The company had stopped paying dividend last year.

The company noted that "the board is focused on a balanced capital allocation strategy and does not intend to take steps that will threaten the company's long-term performance, operating flexibility and investment grade credit rating."