SandRidge dissident shareholder wins four board seats
BY MIKE LEE Bloomberg News
Thursday, March 14, 2013
3/14/13 at 2:53 AM
SandRidge Energy Inc. has agreed to immediately add four new directors supported by TPG-Axon Capital Management LP and will give the activist shareholder majority control of the board if founder Tom Ward isn't fired by June 30.
The board also will "conduct a comprehensive review of the company's strategy and costs" and reduce director pay from $375,000 a year to $250,000, Oklahoma City-based SandRidge said in a statement Wednesday. Chief Operating Officer Matthew Grubb will resign after being at the oil and natural gas producer for seven years.
TPG-Axon, SandRidge's third-biggest shareholder, blamed the seven-member board and Chairman and CEO Ward for "strategic blunders, extraordinary spending and poor governance" that have caused the company's stock to drop. SandRidge has fallen 78 percent since it began selling for $26 a share in 2007.
Wednesday's announcement was made after the close of regular trading on U.S. markets.
The settlement with TPG-Axon, led by former Goldman Sachs Group Inc. banker Dinakar Singh, is another successful shareholder action among a series of campaigns that have shaken up the industry in the past year. Chesapeake Energy Corp. co-founder Aubrey McClendon submitted his resignation after Carl Icahn and Southeastern Asset Management Inc. pushed for changes on the company's board, while Murphy Oil Corp. and Hess Corp. have also been subject to shareholder criticism.
"We believe these actions open a new chapter for SandRidge," board member Jeffrey Serota said in the statement.
TPG-Axon has questioned transactions that SandRidge engaged in with companies associated with Ward or his family members, and it pushed for a new CEO and board. The New York-based fund also wants to reduce debt and sell assets, including as much as half of SandRidge's undeveloped acreage in the Mississippian Lime, an oil and natural gas area in northern Oklahoma and Kansas.
SandRidge said Wednesday it will complete an independent review of related-party transactions questioned by TPG-Axon, with results expected by June 15. A previous review by the company found no wrongdoing.
Stephen C. Beasley, Edward W. Moneypenny, Alan J. Weber and Dan A. Westbrook are being added to the board. The agreement gives the board until June 30 to fire Ward, who founded the company in 2006. If he isn't terminated, three existing board members will exit and a fifth TPG-Axon nominee will join.
Ward would be replaced as interim CEO by Chief Financial Officer James Bennett as the board finds a successor, SandRidge said. Serota would become interim chairman for six months after Ward's departure.
SandRidge has said TPG was running a "false and misleading campaign" to take control of the company without paying a premium. SandRidge has moved away from gas production in favor of higher-priced oil and is in the best financial position in its six-year history, Ward said at a March 5 meeting with industry analysts.
The Carlyle Group LP and Riverstone Holdings LLC are SandRidge's two largest shareholders, according to data compiled by Bloomberg. Ward is the fifth-largest shareholder, with about 5.5 percent of outstanding stock.
Original Print Headline: Dissident investor gets 4 board seats at SandRidge
CEO Tom Ward: The Oklahoma City company's founder could be fired by June 30 under a new agreement.