Billionaire investor Carl Icahn takes on 6 per cent stake in Talisman

Calgary-based oil and gas producer Talisman Energy has become the target of an activist investor.

CALGARY – Oil and gas producer Talisman Energy Inc. (TSX:TLM) has become the target of an activist investor.

Billionaire investor Carl Icahn revealed Monday — in both a U.S. regulatory filing and on Twitter — that he has bought more than 61.5 million shares of Talisman for a 5.97 per cent stake.

“May have conversations with mgmt re strategic alternatives, board seats, etc.,” Icahn tweeted.

In a U.S. regulatory filing, Icahn said the shares were purchased “in the belief that they were undervalued relative to the value of the issuer’s underlying assets.”

“The reporting persons intend to have conversations with members of the issuer’s management to discuss strategic alternatives which may enhance shareholder value, including, among other things, asset sales or potential corporate restructuring. The reporting persons may also discuss the possibility of shareholder board representation.”

About a year ago, Talisman replaced then-CEO John Manzoni with Hal Kvisle, a former boss of pipeline giant TransCanada Corp. (TSX:TRP) who had served on the board.

Under Kvisle’s leadership, Talisman has pared down its portfolio, focusing its capital on two key strategic areas: the Americas and Southeast Asia. It has several assets already on the sale block in the North Sea and elsewhere around the world and has already exited some of its higher-risk exploration areas, such as Peru.

Talisman has also reduced its workforce, and put a greater focus on profitability than on production growth.

“We appreciate constructive input from shareholders and take their views seriously. We are committed to acting in the best interests of the company and give due consideration to constructive recommendations for strategies or actions that have the potential to increase shareholder value,” Talisman spokeswoman Phoebe Buckland said in an emailed statement.

She said Talisman believes its current strategy will position it to be a “highly competitive player” in its core areas and “generate long-term value.”

“The aim of this strategy is to significantly improve total shareholder returns and near-term profitability and is in the best interest of the company and all its stakeholders,” added Buckland.

Last year, Icahn took on U.S. natural gas giant Chesapeake Energy. More recently, Icahn ended his bitter takeover fight for struggling computer maker Dell.

Talisman’s shares closed up 4.8 per cent to $13.15 on the Toronto Stock Exchange on Monday.

In after-hours trading in New York, where Talisman is also listed, the stock surged 7.8 per cent to US$13.75 shortly after the announcement.