Energy
Chesapeake's Largest Shareholder Gets More Aggressive (CHK)
Published:
Last Updated:
Southeastern Asset Management, Inc. is getting aggressive against Chesapeake Energy Corporation (NYSE: CHK). This is no ordinary shareholder either: it is the largest listed shareholder. The new filing shows some 89,854,868 shares owned and/or controlled with shared and direct dispotive power. Some 50.8 million shares being listed as “sole voting power” in the filing.
The first point is that the firm does not think that managing to an arbitrary target like the “25/25 Plan” makes sense. In this manner it noted, “We would also urge the company to accelerate monetizing any assets that are not core to the E&P business (such as midstream & oil services assets) and/or any more E&P assets which are not overly reliant on depressed spot natural gas prices and where the company does not have a leading position.”
Another point is to end the unproductive communication that the company is conducting. Here it urges management to put their heads down and get the items in #1 done. The point is simple in that Chesapeake’s sell-side conferences, media interviews with no hope of a fair hearing, and meetings all over the U.S. with groups who may have only a casual interest but don’t mind hearing the “story” use valuable amounts of top management’s time with no apparent benefit and plenty of misinterpretation detriment. Here it even said “CHK stock has far too many renters and not enough owners, so we would suggest the current system of shareholder communications is not working.”
The largest point to note was one out of context, but it notes, “we urge the board to be open to any offers to acquire the whole company” even though it also noted that it would not encourage any action that would generate a lowball bid versus the net asset value of the company.
Southeastern’s letter was signed by Mason Hawkins (Chairman & CEO), Staley Cates (President & Chief Investment Officer), and Ross Glotzbach (Senior Analyst & Principal).
Chesapeake shares did try to initially rally but this is still down 0.5% at $17.31 against a 52-week trading range of $16.70 to $35.75.
JON C. OGG
The #1 Thing to Do Before You Claim Social Security (Sponsor)
Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.
A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.
Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
