Activist investor Carl Icahn is expected to soon report that he has bought a significant stake of Chesapeake Energy Corp. stock, according to the Wall Street Journal.
Public filings are required when an investor controls at least 5 percent of a company’s stock. No recent public filings have been made about Icahn and Chesapeake, but the Wall Street Journal said such a filing is expected soon, according to “people familiar with the matter.”
Icahn has a history of buying large stakes in companies he thinks are undervalued. He then pressures management and directors to make changes that he thinks will drive up the stock price.
If the report is correct, it would be Icahn’s second round with Chesapeake. In December 2010, Icahn reported a 5.8 percent stake in the Oklahoma City energy company. Chesapeake soon promised to sell assets and reduce its debt. The stock price peaked at $35.61 in February 2011. A few weeks later, Icahn sold at least enough shares to drop below a 5 percent stake.
Chesapeake shares closed at $14.81 on Friday.
Besides his recent experience with Chesapeake, Icahn also has had another, less favorable relationship with an Oklahoma City company.
In February 2005, Icahn announced his intention to buy up to $1 billion of shares in Kerr-McGee Corp. Seventeen months later, Kerr-McGee management agreed to sell the company to Houston-based Anadarko Petroleum Corp. for $18 billion.
The deal was worth $70.50 a share, a 40 percent premium over the Kerr-McGee’s closing price of $50.30 the day before the buyout was announced.
Earlier this month, Icahn won a takeover fight with Sugar Land, Texas-based CVR Energy Inc., which owns the oil refinery in Wynnewood.
Icahn bought a 69 percent stake in CVR for $2.6 billion with an offer to pay $30 per share. CVR management and directors opposed the sale.