SandRidge contends the current board is best suited to lead the company as it continues its transition into an oil producer, focused on the Mississippian play in northern Oklahoma and southern Kansas.
The company's board has said a TPG-Axon takeover would trigger a default in its credit agreement, forcing SandRidge to offer to buy back all of its outstanding senior notes. It later acknowledged that offer is unlikely to be accepted since the notes are trading for more than the repurchase price specified in its indentures.
Evidence in the Delaware case confirmed that is not an issue. SandRidge lender Morgan Stanley told the board its own financial institution would back the $4.3 billion lent to SandRidge even if TPG-Axon's slate took control, the judge wrote in his ruling.
The Delaware case was filed by shareholder Gerald Kallick, who accused the board of breaching its fiduciary duty by refusing to approve TPG-Axon's proposed slate of directors to avert a possible change of control. Kallick supports TPG-Axon's consent solicitation.
Edmond investment adviser Greg Womack said the lawsuit was probably a last-ditch effort by TPG-Axon and its supporters to sway shareholders.
“They're trying to force SandRidge to let the shareholders decide what is the best option for them,” said Womack, president of Womack Investment Advisers Inc.