With the clock ticking down on a takeover attempt of SandRidge Energy Inc. by one of its largest shareholders, a judge has barred the company's board from fighting back until it acknowledges it will cede control if that is what shareholders want.
SandRidge's board has said hedge fund TPG-Axon Capital's move to oust the board, if successful, would constitute a “change of control” that could cost the company more than $4.3 billion. The company later backed off that figure.
Delaware Chancery Court Judge Leo E. Strine Jr. on Friday blocked the SandRidge board from soliciting votes in its ongoing proxy fight until it approves TPG-Axon's director candidates.
SupportSandRidge.com, the company's website to educate shareholders about its fight against TPG-Axon, was not available late Friday.
“Given that the incumbent board has admitted it has no basis to doubt the integrity of the TPG slate or the basic qualifications of that slate to serve with competence as the directors of a public company, the incumbent board is merely basing its refusal to make a decision on its contention that the incumbents are the better choice at the ballot box,” Strine wrote in his 39-page ruling.
SandRidge and TPG-Axon did not respond Friday to requests for comment on the ruling.
SandRidge shareholders have until March 15 to decide if they want to stick with the current board or let TPG-Axon's nominees take over.
TPG-Axon, which owns 7 percent of SandRidge's outstanding stock, is seeking a management change at the Oklahoma City oil company because of the poor performance of its stock, which has dropped 80 percent from its initial public offering in 2007.
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