This content is from: Portfolio

The Morning Brief: Corvex Urges Energen to Seek Buyer

Keith Meister’s activist hedge fund firm says the oil and gas producer has valuable assets but has underperformed its peers.

Keith Meister’s Corvex Management has called on Energen Corporation, an oil and gas producer, to put itself up for sale.

In a regulatory filing, the activist hedge fund firm said the company “has some of the most attractive leaseholds for oil and gas development in the Permian Basin.” Yet, Corvex asserts, the company’s operational performance “has fallen short of its peer companies, leading to underperformance both in terms of financial results and shareholder returns.” So, it urged the company, which has a $5.5 billion market capitalization, to take actions that would boost its value, including a possible sale altogether, “given the recent wave of acquisitions in the Permian Basin” at valuations that far exceed Energen’s current implied value.

Corvex, which said in the filing that it boosted its stake in the company to more than 5.373 million shares, or 5.5 percent of the total outstanding, said representatives from the hedge fund firm expect to continue to have conversations with the company and with third parties, including other oil and gas companies, as well as shareholders. At the end of the first quarter, Corvex owned 1.346 million shares of Energen. Shares of the company rose 2.55 percent on Wednesday, to close at $57.04.

___

The so-called fixer in the bribery scheme involving Och-Ziff Capital Management Group has been sentenced to two years in prison. Samuel Mebiame, a Gabonese national, worked as a consultant to a mining company that was owned by a joint venture between the hedge fund firm and an entity incorporated in Turks and Caicos. Prosecutors were seeking a five-year sentence for Mebiame, the son of a former prime minister in Gabon.

According to the government, between 2007 and 2012, Mebiame conspired with others to bribe top government officials in Chad and Niger in order to obtain business opportunities and mining rights for the joint venture in both of those countries. Mebiame was also accused of paying bribes to high-level government officials in Guinea as an agent of the Turks and Caicos entity to obtain business opportunities and mining rights in that country. The government claims Mebiame provided the officials with cash and other benefits, including an S-Class Mercedes Benz vehicle and the use of private planes, in exchange for special access and confidential information.

Last September Och-Ziff and its subsidiary OZ Africa Management agreed to pay $413 million to settle bribery charges. Daniel Och, who heads up the multistrategy firm, agreed to pay nearly $2.2 million, without admitting or denying guilt, related to charges that he violated the Foreign Corrupt Practices Act (FCPA). (Och Ziff CFO Joel Frank also consented to the order without admitting or denying guilt.)

___

ValueAct Capital sold 1.4 million shares of Willis Towers Watson, reducing its stake to 4.9 percent. As a result, the activist hedge fund firm no longer needs to report timely sales of additional stock in the consulting firm. The hedge fund firm sold the shares for between roughly $140 and $145 per share.

Related Content