Financier Carl Icahn and his investor coalition have dropped their push to gain two seats on Kerr-McGee Corp.’s board of directors, according to a regulatory filing with the Securities and Exchange Commission.

Icahn’s group now controls about 5.95% of the Oklahoma City-based producers shares, and has been an advocate of major changes within the company. However, the filing indicated that the Icahn coalition would abandon a bid for board membership after Kerr-McGee completed a successful tender offer for 46.73 million shares at $85/share. The tender offer to repurchase the shares was about 16% higher than the current share price.

Since Icahn began his bid to control part of the company earlier this year, Kerr-McGee has completed the Dutch auction self-tender offer, accelerated a move to sell or spin off its chemicals unit, and has laid plans to sell about 25% of its production base and 15% of its reserves (see Daily GPI, April 28). The properties slated for sale are located mostly on the Gulf of Mexico shelf, the North Sea and onshore in the United States, and are expected to net between $2-2.5 billion.

“Kerr-McGee is in a delicate position right now,” said Motley Fool in a research note. “With Icahn breathing down its neck, management may be tempted to reach a little further than necessary to ‘prove’ its loyalty to shareholder value. That said, the company has a strong history, and with solid new prospects in places like Alaska, Brazil, China’s Bohai Bay, and the Rockies…management may in fact be cleaning the company up to position it for better growth as a pure exploration and production operator.”

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