(Reuters) - Oil and gas producer Energen Corp said on Wednesday it has settled a long-simmering fight with activist investor Keith Meister by agreeing to review its businesses and appoint two board members in the wake of pressure to sell the company.
Birmingham, Alabama-based Energen, which has operations in the Permian Basin, said it is expanding its board to 11 people and invited energy industry entrepreneur Jonathan Cohen and investor Vincent Intrieri, a longtime associate of billionaire investor Carl Icahn who has sat on numerous boards, to join.
Both men will stand for election at Energen’s 2018 annual meeting, as required by Alabama law. At the meeting, Meister’s Corvex Management, a hedge fund that owns a roughly 10 percent stake in Energen, will support the company’s slate, the oil and gas firm said in a statement.
Activism in the U.S. oil and gas sector has increased as investors seek to boost the value of energy companies weighed down by slumping crude prices after a mid-2014 peak.
New York-based Corvex has spent nearly a year pushing for a sale, hoping to boost Energen’s share price, which has lagged its peers. In the last 52 weeks Energen’s share price has climbed 5.3 percent and was up 0.3 percent to $55.89 in Wednesday trade.
In January Corvex stepped up its pressure by nominating four candidates to Energen’s board, including Cohen, the founder of Atlas Energy and Atlas Pipeline Partners, and Intrieri.
Cohen’s companies were respectively sold to Chevron Corp in 2011 and Targa Resources Corp in 2015. Intrieri worked for years for Icahn. Meister also worked for Icahn before launching his own fund.
Energen Chief Executive Officer James McManus and Meister said in a statement that they have worked constructively and are pleased to have resolved the fight.
Over the last months Meister has criticized the company for making decisions in a vacuum without properly consulting shareholders. Energen complained the hedge fund was pushing for a sale without regard to price or improvements it was making.
As part of their settlement, Energen will consider a possible sale. It will “conduct an in-depth review, assisted by financial advisers, of the company’s business plan, competitive positioning and potential strategic alternatives,” it said in the statement.
Nine months ago the company ended an earlier review by announcing it was sticking to its business plan after J.P. Morgan and Tudor Pickering Holt & Co looked into strategic alternatives.
Reporting by Svea Herbst-Bayliss in New York and Anirban Paul in Bengaluru; Editing by Maju Samuel and Jeffrey Benkoe