SandRidge Energy Inc. said Tuesday it has clarified its position against a takeover attempt by dissident shareholder TPG-Axon, helping move the Oklahoma City energy company into compliance with a Friday court order in Delaware.
The Oklahoma City energy company had previously said that if hedge fund TPG-Axon Capital were successful in its move to oust the SandRidge board, the action 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 approved TPG-Axon's director candidates. The judge also said consent revocation votes in favor of the SandRidge board would not be counted until corrective action was taken.
SandRidge moved to meet that requirement Saturday, but did not announce the action until Tuesday morning.
“In light of the court's ruling, on March 9, 2013, the board approved of the director candidates proposed by the TPG-Axon group for the limited purpose of the change of control provisions of its indentures,” SandRidge said in a statement Tuesday.
While acknowledging a new board would not constitute a change of control, SandRidge restated its opposition to the ongoing proxy fight.
“The board continues to oppose the election of the director candidates proposed by the TPG-Axon group, believes their election is not in the best interest of the company's stockholders and recommends that stockholders support the company's existing experienced board of directors,” the company said.
TPG-Axon, which controls 7.3 percent of SandRidge stock, criticized the Oklahoma City company for taking so long to clarify its earlier statement.
“It is frankly embarrassing and unfortunate that it took the board two months, a lawsuit and a stern ruling by Judge Strine that they may have breached their fiduciary duty, to finally do the right thing for shareholders,” TPG-Axon said in a statement Tuesday.
“This is yet another poor use of shareholder money, a stark example of how the board has attempted to entrench themselves and a reason why immediate change is necessary.”
SupportSandRidge.com, the company's website to educate shareholders about its fight against TPG-Axon, was still down late Tuesday, but SandRidge spokesman Greg Dewey said it should be online again by Wednesday morning.
The site had been unavailable since shortly after Friday's court ruling.
SandRidge shareholders have until Friday to decide if they want to keep the current directors or replace them with TPG-Axon's nominees. Results from the vote are expected Monday.