Oil rig operator Transocean said in a statement that it had received notice from funds affiliated with activist investor Carl Icahn that they would push for a $4.00 per share annual dividend at the annual shareholder meeting. It had been expected Icahn would make such a proposal.

Following the oil spill at Transocean's Deepwater Horizon rig in the Gulf of Mexico, the rig operator suspended its annual $3.25 per share payment in a bid to preserve its investment-grade credit rating and maintain a "strong, flexible balance sheet."

As a result of pressure brought to bear by Icahn, Transocean's board agreed to reinstate the dividend, and said it will recommend an annual payout of $2.24 a share at the annual meeting. Icahn responded in an SEC filing Monday that said the amount was insufficient and it "further highlights a long track record of weak capital allocation strategy." Icahn also said he will seek to nominate at least three alternative director candidates "who we expect to provide a more shareholder friendly capital allocation strategy." 


Transocean remarked it will "evaluate the proposals in due course." 

The article Icahn-Affiliated Funds Seek $4 Dividend at Transocean originally appeared on Fool.com.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool owns shares of Transocean. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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