Energy / Hydraulic Fracturing

Top Chesapeake shareholder urges McClendon and board to consider sale option

NEW YORK, NY — “Southeastern Asset Management, which owns 13.6% of Chesapeake’s outstanding shares, sent a letter to Chairman/CEO Aubrey McClendon and the natural gas producer’s board, pushing management to “focus on maximizing operational cash flow after capex,” rather than ‘managing to an arbitrary [growth] target.’

…The final note from Southeastern’s letter, signed by Chairman and CEO Mason Hawkins, Chief Investment Officer G. Staley Cates and Senior Analyst Ross Glotzbach, urges Chesapeake’s board to be open to any takeover offers. Southeastern is quick to acknowledge that it does not support a “lowball bid” given the company’s current market price, which is below net asset value per share. However, the investors say, that price-to-value gap should not be used ‘as an excuse to refuse discussions with any potential acquirers who would be willing to pay a price today that recognizes the longer term value of the company.'”

— Steve Schaefer, Forbes Staff

Read the whole story:

Special Report: Inside Chesapeake, CEO ran $200 million hedge fund


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