Wednesday, January 16, 2013

Is it an MLP that Icahn is Really After in Transocean?

Carl Icahn’s new stake in Transocean Ltd. (RIG) may raise pressure on the world’s largest offshore driller to put some of its rigs into a tax advantaged partnership as the billionaire seeks to boost his investment’s value.

Transocean’s announcement this week that Icahn bought 1.56 percent of its shares and sought regulators’ permission to own more than 3 percent stirred a debate in the investment community as the activist investor known for shaking up companies remained silent about his intentions. He’s jumping in less than two weeks after Transocean agreed to pay the U.S. $1.4 billion to settle its liability in the 2010 Gulf of Mexico oil spill.

With the company already in turnaround mode, the shares have led peers with a 34 percent gain over the past year, some investors and analysts said they expect the 76 year old to push for Transocean to create a master limited partnership, or MLP, to raise cash for the parent company and spur growth with its tax free structure.

It would be the second drilling rig partnership after Stavanger, Norway based Seadrill Ltd. (SDRL) spun off assets to create Seadrill Partners LLC (SDLP) in October.....Read the entire Bloomberg article.

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