One of the world’s most famous activist investors is suing Occidental Petroleum over its $55bn (£44bn) takeover of rival Anadarko claiming the bid was too expensive, it was revealed today.
Carl Icahn, who has a $1.6bn stake in Occidental, said it should have looked to sell itself instead.
“It is [the Plaintiffs’] belief that Occidental should never have tried pursuing Anadarko and instead should have put itself up for sale,” a lawsuit seen by the Financial Times said.
He said there was a “substantial risk” that Occidental may have to slash its dividend if oil prices drop below $45 per barrel.
He said the deal was “fundamentally misguided and hugely overpriced.”
Occidental swooped in earlier this year after Anadarko had already agreed $33bn merger with US oil giant Chevron.
Occidental’s $38bn offer, which valued Anadarko at $55bn, was deemed better for shareholders and recommended by the target’s board.
The company’s efforts were backed by US billionaire Warren Buffett, who announced a $10bn investment in Occidental.
Shares were largely unmoved today.