Shareholder advisory firm Egan-Jones Proxy Services is endorsing the current management at SandRidge Energy Inc. in its ongoing proxy fight with one of its largest shareholders, the company announced Tuesday.
“We are not convinced that election of the dissidents' slate to the board of directors would work to the benefit of shareholders,” the proxy advisory firm said.
Hedge fund TPG-Axon Capital, which owns about 7 percent of SandRidge's outstanding stock, is pushing fellow shareholders to oust CEO Tom Ward and the current board, arguing the market has lost confidence in them. TPG-Axon has nominated its own candidates to replace SandRidge's board.
Shareholders have until March 15 to decide whether to side with TPG-Axon or retain the company's current leadership.
“We are pleased with Egan-Jones' recommendation,” SandRidge said Tuesday. “Our highly qualified and independent board has taken decisive steps over the last few years to transition SandRidge to an oil focused producer with a leading position in the Mississippian play.
“We firmly believe that the current board has the right combination of skills, experience and expertise to oversee the continued execution of our strategic plan and deliver long-term value for our stockholders.”
Egan-Jones said SandRidge is making strides in addressing its financial problems, mostly by improving its liquidity.
“In particular, the announced sale of the mature Permian assets for $2.6 billion will generate cash proceeds of over $1.4 billion in excess of the company's net investment, dramatically reducing the net debt balances and give the resources needed to fund growth in the Mississippian,” according to the firm's analysis.
Last week, advisory firm Institutional Shareholder Services recommended replacing five of SandRidge's seven board members with TPG-Axon's nominees.
Institutional Shareholder Services suggested leaving Ward in place until the newly organized board could select a new chief executive.