Chesapeake Energy Corp. said two of its directors, including a representative of No. 2 investor Carl Icahn, resigned effective Monday, less than a week after Icahn reduced by half his stake in the Oklahoma City-based natural gas producer.
In a Form 8-K filing with the U.S. Securities and Exchange Commission, Chesapeake said John Lipinski, who was appointed in June 2014, and Icahn director Vincent Intrieri, appointed in June 2012, had resigned.
According to the filing, the decision by both men was "not the result of any disagreement with the company on any matter relating to its operations, policies or practices." Lipinski had served on the audit and compensation committees. Intrieri, who was named to the board at Icahn's behest, has worked for Icahn-related entities since 1998. He served on Chesapeake's audit, finance and nominating, governance, and social responsibility committees.
The resignations came one week after Icahn revealed he had reduced his stake in Chesapeake to 4.55%, about half of what he held at the end of December 2014 (see Shale Daily, March, 24, 2015). In a statement Icahn said CEO Doug Lawler and his team had been doing "an admirable job" and reducing his stake was to recognize a capital loss for tax planning purposes.
Icahn became Chesapeake's second largest shareholder in 2010 (see Daily GPI, Dec. 22, 2010). In 2012, as Chesapeake faced pressure from falling gas prices and reports of financial improprieties by then-CEO Aubrey McClendon, Icahn increased his stake to 7.6% (see Shale Daily, May 29, 2012). Icahn, working with No. 1 shareholder Southeastern Asset Management (13.8%), maneuvered to replace four board members, with three from Southeastern and one he would appoint.
Chesapeake also detailed its latest tender offer, which is designed to improve its capital structure. The 8-K filing said Chesapeake agreed to pay $800 million to repurchase $897.7 million in bonds that were surrendered by investors. In another offer, Chesapeake agreed to pay $699.3 million for $708 million in bonds.