SandRidge Energy lashes out at Icahn Capital for attempting to control its board

The fierce dispute between the oil and natural gas group SandRidge Energy (NYSE:SD), and the activist investor Carl Icahn took another turn today as a new letter to shareholders from SanRidge harshly criticizes its biggest shareholder Icahn Capital for attempting to take over its board.

In the letter, SandRidge directors accuse Icahn of “seeking to gain control” of SandRidge by asking shareholders to reject the company’s current directors and replace them with a slate of directors loyal to his own interests.

They argue that Icahn’s proposed coup is aimed at bypassing SandRidge’s ongoing effort to evaluate offers from other companies looking to buy or partner with the company.

“Icahn has made clear his desire to acquire SandRidge, and is seeking to gain control without paying you an appropriate premium or participating in a competitive process,” wrote SandRidge directors in the letter.

SandRidge is strongly recommending that shareholders vote to elect all five of SandRidge’s directors: Sylvia Barnes, Kenneth Beer, Michael Bennett, William Griffin and David Kornder at the company’s annual meeting on June 19. In addition, the board is recommending tht shareholders vote for only two independent directors, proposed by Carl Icahn – Jack Lipinski and Randolph C Read.

“[We] believe there is no benefit to providing Icahn a third seat on our Board,” wrote the five SandRidge directors in their letter.

Turning over control of the Board to Icahn would “drive away competition and position Icahn to consolidate control of our company as cheaply as possible,” the directors warned.

SandRidge hired Glass Lewis, an independent proxy advisory firm, to offer advice on how to handle Icahn’s demands to reject the company’s current directors.

The letter to shareholders criticizes Carl Icahn and his history of activist investing in scathing terms. The SandRidge directors argue that Icahn has presided over the destruction of $27bn of shareholder value across the six energy companies in which he has made investments and agitated for change since 2010.

The letter follows Icahn’s open letter to SandRidge shareholders last month, in which he demanded that the company’s current directors be replaced.

“We believe this drastic measure is warranted because, since emerging from bankruptcy, the board has exhibited a clear and consistent pattern of failure,” Icahn wrote.

In morning trade, SandRidge Energy shares were flat at US$14.56.

Story by ProactiveInvestors