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Icahn teams up with protege in Energen deal that makes for an activist trifecta

Liz Moyer
  • Keith Meister, a former principal executive at Icahn Enterprises, has been pressuring oil and gas exploration company Energen over the last year.
  • Meister's Corvex Management announced Monday a deal to sell some of its stake in Energen to Carl Icahn in what could lead to the two buying the energy company.
  • Paul Singer's Elliott Management also holds a stake in Energen and sided with Corvex last year.

It's an activist trifecta.

Carl Icahn is joining his protege, Keith Meister, in a deal that may ultimately lead to their purchase of oil and gas producer Energen Corp EGN .

And any deal could also affect activist Paul Singer's Elliott Management, which took a stake in Energen last year and sided with Corvex in pushing for a sale.

Meister founded his own firm, Corvex Management, in 2010 after years learning the activist trade at Icahn Enterprises, where he was vice chairman of the board and principal executive officer.

Corvex has spent more than a year pressuring Energen to seek a buyer, saying the company had valuable assets in the prolific drilling terrain known as the Permian Basin but that its shares were undervalued. Earlier this year, it nominated four candidates to Energen's board to ratchet up the pressure. The two sides came to an agreement in March, when Energen agreed to appoint two board members and begin a strategic review of its business.

One of those new board members was Vincent Intrieri, a former senior managing director at Icahn Capital Management who retired from that firm last year. He served on the boards of several companies on behalf of Icahn during his time there, including Hertz Global Holdings HTZ and Transocean RIG , where he still sits, and Chesapeake Energy Corp CHK ., where he sat from 2012 to 2016. He joined Energen's board in March.

But the story is not ending there. On Monday, Corvex said in an amended securities ownership filing with the Securities and Exchange Commission, that it had a deal to sell some of its stake to Icahn.

Following the transaction, Corvex will have 8.46 million Energen shares, or about 8.7 percent, about even with fellow top shareholder Vanguard Group, but smaller than the nearly 10 percent it previously held, according to FactSet. And Icahn would end up with 4 million shares, or about 4.1 percent, the filing said.

In March, Energen said its board had begun an in-depth review of its strategic options, getting advice of J. P. Morgan and Tudor Pickering Holt & Co. Corvex said in the filing on Monday that it believes the company's shares are undervalued and that it may "have an interest in joining with other parties to acquire the issuer as part of the strategic initiatives process or otherwise."'

Last year, Singer's Elliott Management joined Corvex in pushing Energen to sell. It holds about 3 percent of Energen's shares, according to FactSet.

Elliott said in March it supported Energen's decision to review strategic alternatives. "We expect that any such review, to be considered truly comprehensive, will be conducted with shareholder input and will include full engagement with interested acquirers," it said in March.

A spokesman said Elliott wasn't commenting on Monday's news.

When Energen announced its settlement Corvex, Meister released a statement saying, "We are pleased to have worked constructively and to have reached a resolution that will bolster the Board with new highly qualified directors as we pursue our common goal of enhancing shareholder value."

A spokesman said Energen declined to comment.

Icahn is scheduled to appear on CNBC around 12:30 p.m. Monday.

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