"These are a few of my scariest things"


There are some things that are really scary: Like, when I find myself agreeing with Carl Icahn. Icahn, the owner of a substantial piece of Occidental Petroleum, filed suit today over Oxy's seemingly endless quest to buy and merge with Anadarko. (It can't possibly have been going-on for as long as it seems.)

Oxy management had it all figured out: If they merged with Anadarko the old fashioned way, they'd have to get shareholder permission to issue a whole bunch of new shares to Anadarko's shareholders.

Instead, they found a White Knight, Warren Buffet, who had plenty of cash and was willing to let them use it. In return, Buffet got a sweetheart deal on a big chunk of Oxy preferred shares. This didn't require shareholder approval - and allows Oxy to pay cash for the acquisition.

It also sent a clear and unequivocal message from Oxy to their current shareholders: 1) You aren't going to like this merger proposal, and 2) We don't give a big fat rat, we're gonna do it anyway.

So, the "activist investor,"* Icahn, has sued. The scary part for me -- I think he's right! It's Friday so he gets a big "Mazel Tov" from me.

*1) "Activist Investor" is the current polite euphemism for "Corporate Raider" -- It sounds so much more genteel - doesn't it? Both terms have been used to describe Icahn at various points in his career.

#MergersandAcquisitions

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