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SandRidge shareholder pushing for changes

One of SandRidge Energy Inc.'s largest shareholders is calling for a change in management at the company, citing its “disastrous” stock performance.
BY JAY F. MARKS Modified: November 8, 2012 at 9:16 pm •  Published: November 8, 2012

Investment firm TPG-Axon Capital is optimistic about the future of SandRidge Energy Inc. and its oily asset base.

But not with the company's current management team at the helm.

TPG-Axon, one of SandRidge's largest shareholders, is seeking to replace CEO Tom Ward and some of the company's board members.

The firm, which owns more than 4.5 percent of SandRidge's outstanding stock, contends the market has lost confidence in the company's management, as evidenced by its 76 percent decline since its initial public offering in 2007. SandRidge's stock also has dropped more than 91 percent since its peak in 2008.

“Although we are enthusiastic about the value potential in SandRidge, we have grown increasingly concerned about the ability of this management team, or of the board of directors to protect shareholder interests,” TPG-Axon CEO Dinakar Singh wrote Thursday in a letter to SandRidge's board.

TPG-Axon maintains SandRidge stock should be valued at $12 to $14 a share. It closed Thursday at $6.10, up a dime. More than 40 million shares changes hands, nearly four times its average volume.

Ward declined to comment on the letter Thursday, but SandRidge issued a statement in response.

“The board and management value the opinions of our shareholders and are always open to constructive engagement with them,” the company said. “While our perspectives on various points made in the letter from TPG-Axon differ in many instances, we agree that SandRidge has valuable assets and that we need to focus on improving performance for shareholders.

“The board continues to actively work with management in taking steps to improve shareholder performance.”

Shareholder complaints

RBC Capital Markets analyst Scott Hanold said activist investors have forced positive changes at other oil and natural gas companies over the past year, but a “complete management overhaul may prove difficult.”

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