Oklahoma City-based Kerr-McGee Corp.'s CEO said last week that a decision to sell or spin off the company's chemical division will be made by the end of the year. The company announced in March it would exit the chemicals business to concentrate on oil and natural gas exploration (see NGI, March 14).
Following the company's annual shareholder meeting, Luke R. Corbett told the Associated Press that he hopes to have "clarity" by the end of the year on the chemicals division. "If it's a sale, we will probably know early in the fourth quarter."
Thomas Adams, president of Kerr-McGee's chemicals division, said the unit has attracted several potential buyers, and some of them will be visiting the company for a more detailed review in the weeks ahead.
However, Adams said that Kerr-McGee also is considering offering the business to the public through an initial public offering (IPO). If an IPO is pursued, he said the company would file a registration statement with the Securities and Exchange Commission in a few weeks. By using both options, Adams told AP that the company "will be in a position to determine which will provide the greatest opportunity for shareholders. The key thing from Kerr-McGee chemical is to add value to Kerr-McGee shareholders."
There was little mention of the proxy battle recently waged by financier Carl Icahn to control stock and two board seats. Because of litigation between Kerr-McGee and Icahn, the meeting adjourned without the election of two board positions. The meeting will reconvene on June 7 to complete the election.
Shareholders supported the board's positions on all items voted on during the meeting, however. They ratified Ernst & Young LLP as independent auditors with 93% of the votes cast. They also approved the 2005 long-term incentive plan with 76% of the votes. Shareholders also approved amendments to increase the authorized number of shares of common stock to 500 million from 300 million with 77% of the vote. And, with 91% of the votes cast, they defeated a request by a shareholder to establish an Office of the Board of Directors.
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