LNG

Cheniere Energy is ending its boardroom links with US activist investor Carl Icahn who swooped on the company in 2015 to force boardroom changes in what he said was in the interests of shareholders.

Cheniere has just signed an agreement to repurchase about $350 million of the company’s common shares beneficially owned by Carl Icahn and certain of his affiliates.

The deal was at the purchase price of $130.52 per share, the closing price of Cheniere’s common shares on June 14.

The purchase of the shares will be funded from Cheniere’s cash on hand and is part of the company’s $1 billion share repurchase authorization. The transaction was expected to close no later than June 21.

“Pursuant to a nomination and standstill agreement entered in 2015, the company agreed to give Icahn Enterprises one board seat for as long as it continued to hold at least 7,741,412 common shares,” explained Cheniere, the owner of the Sabine Pass export plant in Louisiana and the Corpus Christi plant in Texas.

The arrival of Icahn as an investor in Cheniere saw the eventual departures of founder and then CEO and Chairman Charif Souki along with other executives.

Souki went on to start Tellurian Inc. and to develop the Driftwood LNG plant in Louisiana, which has now entered the construction phase.

Last director

“This transaction will result in Icahn Enterprises’ holdings in the company to be under this threshold and the remaining director designee, Andrew Teno, will resign from the board of directors within two business days following the closing of the agreement,” said Houston, Texas-based Cheniere.

Cheniere said the $350M repurchase reflected “efficient execution” of its long-term capital allocation plan at a time when environmental priorities and energy security have natural gas as a key focus globally.

“We appreciate Carl Icahn and his Board representatives for their support of Cheniere over these last almost seven years as we have become the world’s second-largest LNG operator,” said Jack Fusco, Cheniere’s President and CEO.

“They have provided guidance and insight which has meaningfully contributed to Cheniere’s growth and strategy over that time,” added Fusco.

Icahn said his investments in Cheniere was a key example shareholder activism efforts.

“We were instrumental in hiring CEO Jack Fusco, who has assembled a great team and unlocked the value of a fantastic asset,” explained Icahn.

“As we have said many times, when the time for activism is over, we generally take a profit on a portion of our stock. To date, we have made over $1.3 billion in realized and unrealized gains on Cheniere and, even after the sale today, we still remain sizeable owners of Cheniere stock,” he stated.

Shares in Golar LNG, the carrier fleet operator and project developer, plunged 32 percent on the Nasdaq global exchange after one of its associates was caught up in a Brazilian corruption investigation involving another company.

Air Products, the US maker of LNG processing equipment and a leading industrial gases provider and plant developer, reported a 13.4 percent rise in fiscal quarterly net income from continuing operations as sales declined 2 percent from a high base to $2.2 billion.