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Carl Icahn hikes stake in Chesapeake Energy to 8.9 percent
November 20, 2012 / 12:26 PM / 5 years ago

Carl Icahn hikes stake in Chesapeake Energy to 8.9 percent

(Reuters) - Billionaire investor Carl Icahn, the second-largest shareholder in Chesapeake Energy Corp (CHK.N), has raised his stake in the U.S. oil and gas company to 8.9 percent, a regulatory filing shows.

Chesapeake Energy Corporation's 50 acre campus is seen in Oklahoma City, Oklahoma, on April 17, 2012. From a single 6,000-square-foot building in 1989, the multi-building complex today contains almost one million square feet of office space and includes employee perks like on-site Botox treatments at the headquarters. Chesapeake Energy Corp. CEO Aubrey McClendon is one of the most successful energy entrepreneurs of recent decades. But he hasn't always proved popular with shareholders of the company he co-founded, the second-largest natural gas producer in the United States. Now, a series of previously undisclosed loans to McClendon could once again put Chesapeake's CEO and shareholders at odds. Picture taken April 17, 2012. REUTERS/Steve Sisney

Icahn and investor Mason Hawkins, who owns 13.5 percent of Chesapeake, took control of the company’s nine-member board of directors in June in an effort to shore up its finances and deal with a governance crisis.

The new board is contemplating strategies to reduce spending and debt, but nothing has been announced so far. The company’s third quarter earnings report showed debt rising to $16 billion and investors were disappointed when the company said some expected deal closings may be pushed into next year.

“Chesapeake delivered solid operational results in the third-quarter, but remains short of capital and allowed some planned asset sales to slip to 2013,” analysts at Raymond James said in a note to clients.

Icahn and Hawkins are “likely to require a more disciplined approach to fundraising and spending,” the analysts said.

Through the third quarter, Chesapeake had closed or announced $12 billion in deals for oil and gas properties. Asset sales are needed to help close a 2012 funding shortfall that some analysts projected at $10 billion.

    Icahn, who did not respond to a request for comment, previously reported a 7.56 percent stake in the company.

    Analysts at Robert W. Baird speculated that Icahn saw a bargain and bought more because Chesapeake’s shares have down 18 percent from the year’s high of $21.58 hit in October.

    Shares of Chesapeake rose 17 cents, or nearly 1 percent, to $17.64 in afternoon New York Stock Exchange trading.

    Reporting by Anna Driver in Houston and Swetha Gopinath in Bangalore; Editing by Maju Samuel, John Wallace and Bob Burgdorfer

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