Icahn Could be a Game-Changer for Transocean

Transocean Ltd., the world’s largest offshore rig operator, climbed to the highest in 10 months after billionaire investor Carl Icahn said he’s acquired a 1.56 percent stake and is seeking more.

The company, based in Vernier, Switzerland, rose as much as 3.1 percent to 50.9 francs, the highest since March 27, and traded up 2.8 percent at 50.6 francs as of 10 a.m. local time.

Transocean said Icahn notified the company that he’s seeking regulatory approval to potentially acquire shares worth more than $682.1 million, according to a statement put on its website yesterday. Transocean said Jan. 3 it agreed to pay $1.4 billion in penalties for its role in the worst U.S. maritime oil spill in the Gulf of Mexico in 2010. Transocean shares lost more than half their value in the months following the accident and remain about 40 percent below their pre-spill price.

“The occurrence of the famous billionaire activist investor Icahn is likely to be a game changer for the firm,” said Michael Romer, an equity analyst at Bank Sarasin & Cie AG in Basel, in an e-mailed note. We expect Icahn “to put management under pressure.”

Icahn is known for buying stakes in companies he considers to be under-performing and pushing for change. Last year he acquired large stakes and drove for new board members at energy companies Chesapeake Energy Corp., an Oklahoma City-based natural gas producer, and CVR Energy Inc., a Sugar Land, Texas- based oil refiner.

Top Shareholder

Icahn’s planned additional purchase of Transocean shares would amount to at least 3.4 percent of the company based on the Jan. 11 closing share price of $54.09, and would make Icahn one of the top two shareholders.

Capital Group Companies Inc. is the largest shareholder with a 4.92 percent stake worth $995.7 million and Franklin Resources is second with $524.6 million of shares, according to data compiled by Bloomberg.

Since the 2010 disaster, the company has continued to dominate the Gulf of Mexico’s deep-water drilling market. Fourteen of the 37 rigs actively drilling in Gulf water depths of at least 1,000 feet (305 meters) are owned by Transocean, more than any other operator, according to Dice Holdings Inc.’s Rigzone, which tracks global offshore rig data.

– Brian Swint, Copyright 2013 Bloomberg.