“The Icahn Lift,” Is Transocean Poised for Another Big Jump?

Image (c) Reuters/Chip East

Deep water drilling firm Transocean (NYSE:RIG) reported this evening that billionaire investor Carl Icahn has notified them that he is seeking approval to potentially acquire voting securities in an amount exceeding the $682.1 million Hart-Scott-Rodino threshold,* but less than that Act’s threshold of 25% of the outstanding voting securities.  Mr. Icahn currently holds shares of Transocean in an amount totaling 1.56% of the issued shares and has a synthetic long position in shares of Transocean (including options to acquire shares) representing 1.70% of the issued shares.

This is interesting news considering the investment history of Mr. Carl Icahn, an obsessive activist investor who has a habit of buying significant stakes in troubled companies, firing CEOs, selling off assets, restructuring, and ultimately reaping huge rewards for himself and shareholders.

He is rumored to be worth somewhere in the ballpark of $14 billion.

Leslie Stahl from CBS’s 60 Minutes interviewed Mr. Icahn following his notorious takeover of TWA Airlines in 1986 as well as in 2008 while profiling the “Icahn Lift” that tends to happen to a company’s stock price when he “gets involved.”

In November 2012, Icahn purchased a 10% stake in Netflix and within a day, shares of Netflix soared 14%.

In 2011, rumors of an Icahn stake in Research in Motion sent shares up 6%.

Last month, sketchy reports of Icahn’s interest in Hewlett-Packard boosted their share price by almost 3%.

RIG is up 20% so far this year following their settlement with the US Government on civil and potential criminal claims associated with the 2010 Deepwater Horizon disaster.

*The HSR Act provides that parties must not complete certain mergers, acquisitions or transfers of securities or assets, including grants of executive compensation, until they have made a detailed filing with the U.S. Federal Trade Commission and Department of Justice and waited for those agencies to determine that the transaction will not adversely affect U.S. commerce under the antitrust laws.

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