April 25, 2013
/PRNewswire/ -- Carl C. Icahn today delivered the following open letter to shareholders of Transocean Ltd.
Dear Fellow Transocean Shareholders:
ISS today announced its recommendation that shareholders vote
Jose Maria Alapont
. We are very pleased that ISS shares our view. ISS concludes "it seems clear the dissidents have made a compelling case that some change on the board is warranted" and that "shareholders would be best served by supporting the election of Alapont, a former CEO with experience setting operating targets and holding executives accountable for execution, and Merksamer, who offers strong analytic acumen and credible shareholder perspective."
ISS also recommends that shareholders vote
. In fact, ISS concludes that "Shareholders may wish to hold
, a longtime incumbent, responsible for the long term performance and outcome of strategic choices the company has made. Additionally he was CEO at the time the events triggering the Norwegian tax case happened." We fully agree with the ISS case against Talbert and Sprague.
While we respect ISS' views, we continue to believe shareholders should also vote
. As ISS noted Mr. Lipinski has spent "his entire career in the oil industry, currently as CEO of CVR Energy. CVR outperformed its peers...Since Icahn took control, outperformance has been substantial." This is in contrast to Transocean's performance, as noted by ISS:
Over the five years prior to Icahn disclosing its stake in RIG, the company underperformed the median of peers by 58 percentage points. While the Macondo incident was a factor in this result, we note that the company was already underperforming peers by 21 percentage points before that incident.
We continue to believe Mr. Lipinski has strong industry experience and that Transocean would benefit greatly from his joining the Board. We strongly recommend that shareholders vote
Shareholders will also have a choice to vote
our distribution proposal of
. Based on the Company's decision making over the past few years, we believe it is critical that capital is returned to shareholders and that it does not remain in the discretion of the Board to use that capital as they view best. We believe that this Board's capital allocation decisions over the past several years have been marked by ill-advised acquisitions that have destroyed at least
of shareholder value. And, perhaps of most concern to us, the Board and management continue to believe the GSF and Aker acquisitions were successes. As ISS notes:
While it might be debatable what RIG was actually pursuing with the GSF acquisition, the end result was not: over the past four years, RIG has lost 27% of its revenues, while the peer group as a whole increased revenues by 20% (excluding Ensco...) Even if one adds back the
$1.1 billion in revenues the company argues it lost because of Macondo, the difference would still be substantial.
WE URGE SHAREHOLDERS TO VOTE AT THE 2013 TRANSOCEAN ANNUAL GENERAL MEETING FOR THE ICAHN PROPOSAL TO INCREASE THE DIVIDEND AT TRANSOCEAN TO $4.00 PER SHARE AND FOR THE ICAHN PROPOSAL TO ELECT JOSE MARIA ALAPONT, JOHN J. LIPINSKI AND SAMUEL MERKSAMER TO THE TRANSOCEAN BOARD OF DIRECTORS.
Very truly yours,