TPG-Axon, beneficial owner of 6.7% of the outstanding shares of SandRidge Energy, Inc. (NYSE: SD) (the “Company”), today issued the following statement and rebuttal to SandRidge’s press release regarding related party transactions issued Friday, January 25, 2013.
“The Board’s disappointing response on Friday shows disregard for both facts and stockholders. Nowhere in its press release did the Company refute the accuracy of the facts we presented. Therefore, there can be no doubt that SandRidge’s Board of Directors has failed stockholders by allowing its CEO's immediate family, using entities he created or funded, to compete with the Company in one of the most crucial aspects of its primary business – acquiring the mineral rights to land in the Mississippian. Furthermore, since many of the directors have either long-standing business relationships with Mr. Ward or have had direct business relations with the Company, we disagree with the very characterization of this Board as independent. For the Board to dismiss our concerns as ‘entirely unremarkable’ is in fact remarkable,” said TPG-Axon.
TPG-Axon notes the following in response to the primary points made in the statement from the SandRidge’s Board of Directors:
WCT Resources' Independence:
The Board of Directors is asking its stockholders to believe that the "management of WCT Resources…including Mr. Ward's son…are independent of the Company." The following facts continue to be true:
- The CEO of WCT Resources is the son of the SandRidge’s CEO;
- WCT Resources appears to have few employees and resources relative to SandRidge;
- WCT Resources and SandRidge shared an address until last year;
- WCT Resources is owned by trusts established by Tom and Sch’ree Ward and whose trustee is a SandRidge employee;
- The COO of WCT Resources recently worked at SandRidge.
These facts, along with the significant and curious overlap of activity should cause a reasonable person, at the minimum, to be skeptical of claims of independence.