Nov 11 (Reuters) - Transocean Ltd said it reached anagreement with Carl Icahn that would see the offshore drillerpaying out a dividend and reducing the number of board seats, ina move that resolves a months-long proxy battle.
As per the agreement, Transocean would pay a $3 dividend,while reducing the maximum number of directors to eleven fromfourteen. Icahn had previously pressed for a $4 per sharedividend.
Icahn, after disclosing his 5.6 percent Transocean stake inJanuary, has gone after the world's largest drilling contractorover "ill-advised" mergers and "unsuccessful" developmentstrategies.
The activist investor has been campaigning for a higherpayout and calling for major changes to the Switzerland-basedcompany's board.
Transocean introduced its first regular dividend in nineyears in 2011, but decided to halt it while working through theprolonged legal process to determine liability for the 2010 Gulfof Mexico spill, which involved one of its rigs.
Transocean on Monday said it would implement a MasterLimited Partnership-type yield vehicle ("MLP") to provideadditional financial flexibility.
The initial public offering of the MLP is expected to becompleted around the middle of 2014 with a minority interestsold at that stage, the company said in a statement.
The deal will also see the re-election of Samuel Merksamerand the appointment of Vincent Intrieri to the board.
Merksamer is employed by Icahn Capital LP, a subsidiary ofIcahn Enterprises LP, and was elected to the company'sboard at its 2013 annual general meeting in May.
Intrieri has been employed by Icahn-related entities for thepast fifteen years in various investment related capacities,Transocean said.
As per the agreement, Transocean will target an improvementin operating margins of about $800 million by the end of 2015.The company earlier promised to cut $300 million of costs by2014.
Icahn Group has agreed to vote in favor of director nomineesand certain other proposals Transocean may recommend at the 2014AGM, the company said.
"I am pleased that the board has agreed to add VinceIntrieri as a nominee, and to reduce the board size to elevenand I am especially happy about the commitment to pursue a MLP,raise the dividend and increase margins by $800 million throughcost cutting and increased efficiency," Carl Icahn said in astatement on Monday. (Reporting by Sakthi Prasad in Bangalore; Editing by SupriyaKurane)
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