SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Chesapeake Energy Corporation |
(Name of Issuer)
Common Stock, Par Value $0.01 |
(Title of Class of Securities)
165167107 |
(CUSIP Number)
Keith Schaitkin, Esq. Icahn Capital LP 767 Fifth Avenue, 47th Floor New York, New York 10153 (212) 702-4300 |
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
June 3, 2012 |
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Section 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.
NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.
* | The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. |
The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
SCHEDULE 13D
Item 1. Security and Issuer
The Schedule 13D filed with the Securities and Exchange Commission (the SEC) by the Reporting Persons on May 25, 2012 (the Initial 13D), with respect to the Common Stock, par value $0.01 (the Shares), issued by Chesapeake Energy Corporation (the Issuer), is hereby amended to furnish the additional information set forth herein. All capitalized terms contained herein but not otherwise defined shall have the meanings ascribed to such terms in the Initial 13D.
Item 4. Purpose of Transaction
Item 4 of the Original 13D is hereby amended by adding the following:
The Reporting Persons plan to continue discussions with management and fellow board members regarding several topics, including but not limited to the following: the selection of an independent Chairman and the formulation of a more conservative capital plan, which would encompass cost savings initiatives, such as but not limited to the sale of the midstream assets, as well as limiting capital spending.
While the Reporting Persons have stated in the past that they believe Chesapeake to be greatly undervalued, they would not want the Issuers board or management to use this as an excuse to discourage would-be acquirers willing to pay a meaningful premium which would reflect the long-term value of the company.
Additionally, Mr. Icahn reached an agreement yesterday with the Issuer pursuant to which he or his designee will be added to the Issuers board of directors. See attached press release.
Item 7. Material to be Filed as Exhibits
Exhibit 1 Press release dated June 4, 2012.
SIGNATURE
After reasonable inquiry and to the best of each of the undersigned knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated: June 4, 2012
ICAHN PARTNERS MASTER FUND LP
ICAHN PARTNERS MASTER FUND II LP
ICAHN PARTNERS MASTER FUND III LP
ICAHN OFFSHORE LP
ICAHN PARTNERS LP
ICAHN ONSHORE LP
BECKTON CORP.
HOPPER INVESTMENTS LLC
BARBERRY CORP.
HIGH RIVER LIMITED PARTNERSHIP
By: | Hopper Investments LLC, general partner | |||
By: | /s/ Edward E. Mattner | |||
Name: | Edward E. Mattner | |||
Title: | Authorized Signatory |
ICAHN CAPITAL LP
IPH GP LLC
ICAHN ENTERPRISES HOLDINGS L.P.
By: | Icahn Enterprises G.P. Inc., its general partner |
ICAHN ENTERPRISES G.P. INC.
By: | /s/ SungHwan Cho | |
Name: | SungHwan Cho | |
Title: | Chief Financial Officer |
/s/ Carl C. Icahn |
CARL C. ICAHN |
Exhibit 1
News Release |
FOR IMMEDIATE RELEASE
JUNE 4, 2012
CHESAPEAKE ENERGY CORPORATION AGREES WITH TWO LARGEST
SHAREHOLDERS ON PLAN TO RECONSTITUTE BOARD OF DIRECTORS
Company to Add Four New Independent Directors; Four Existing Directors to Resign,
a Fifth to Retire; Selection of New Independent Non-Executive Chairman Nearing
Completion; Aubrey K. McClendon to Remain Chief Executive Officer and a Director
Majority Voting Standard Would Be Applied to Results of 2012 Annual Meeting;
Board to Support Annual Election of All Directors
OKLAHOMA CITY, OKLAHOMA, JUNE 4, 2012 Chesapeake Energy Corporation (NYSE: CHK) today announced that following extensive discussions with its two largest shareholders, Southeastern Asset Management and Carl C. Icahn and his affiliated entities, who own, respectively, approximately 13.6% and 7.6% of the Companys common stock, Chesapeake has agreed to a plan to reconstitute its Board of Directors by adding four new independent directors to replace four existing independent directors who will resign from the Board upon the appointment of the new directors. Three of the new independent directors will be proposed by Southeastern and the fourth independent director will be Mr. Icahn or a person designated by Mr. Icahn, with Mr. Icahn making that determination prior to the reconstitution of the Board.
In addition, as previously announced, a fifth existing independent director is retiring at the 2012 Annual Meeting of Shareholders and will be replaced subsequently by a new independent Non-Executive Chairman through a selection process that is nearing completion. The new independent Non-Executive Chairman, who will have no previous substantive relationship with Chesapeake, will be confirmed by the reconstituted Board and will be acceptable to Southeastern and Mr. Icahn. Aubrey K. McClendon will relinquish the position of Chairman when the new Chairman is appointed and will continue as Chief Executive Officer and a director. Chesapeake will announce the new Board composition, including the independent Non-Executive Chairman, on or prior to June 22, 2012. The size of the Board will remain at nine directors.
In connection with Chesapeakes 2012 Annual Meeting of Shareholders scheduled to be held on June 8, 2012, the Board of Directors has determined that if the amendment to Chesapeakes bylaws to implement majority voting in director elections is approved by Chesapeake shareholders, it will be immediately implemented and applied to the results of the 2012 Annual Meeting. The Board will also seek relief from the Oklahoma statute mandating classified boards of directors for certain Oklahoma incorporated public companies so that shareholders will have the opportunity to elect the entire board of directors at the 2013 Annual Meeting of Shareholders.
CHESAPEAKE CONTACTS: |
MEDIA CONTACTS: | CHESAPEAKE ENERGY CORPORATION | ||||||
Jeffrey L. Mobley, CFA (405) 767-4763 jeff.mobley@chk.com |
John J. Kilgallon (405) 935-4441 john.kilgallon@chk.com |
Michael Kehs (405) 935-2560 michael.kehs@chk.com |
Jim Gipson (405) 935-1310 jim.gipson@chk.com |
6100 North Western Avenue P.O. Box 18496 Oklahoma City, OK 73154 |
Merrill A. (Pete) Miller, Jr., Chesapeakes Lead Independent Director and President and Chief Executive Officer of National Oilwell Varco, said, We are pleased to announce these important actions taken by the Board in consultation with our two largest shareholders to further enhance Chesapeakes corporate governance for the benefit of all shareholders. We greatly appreciate the substantial contributions of all of our directors, but recognize our shareholders desire for change. Following implementation of these initiatives, the Chesapeake Board will have been substantially reconstituted with five new independent directors, including a new independent chairman, in addition to Lou Simpson who joined the Board last year.
Aubrey K. McClendon, Chesapeakes Chief Executive Officer, said, Todays announcement is the culmination of a continuing effort by Chesapeakes Board to address shareholder concerns and better position the Company for the future. I am fully supportive of these measures and remain focused on executing Chesapeakes strategy. I have great respect for the talent, commitment and dedication of our current Board members, each of whom has played a key role in helping build our successful company. At the same time, I look forward to working with our new directors to continue creating substantial shareholder value from the extraordinary set of assets Chesapeake has acquired and developed in recent years.
O. Mason Hawkins, Chairman and Chief Executive Officer of Southeastern Asset Management, the Companys largest shareholder, said, We are pleased that Chesapeake is being responsive to issues raised by us and many of the Companys other shareholders. These steps to reconstitute the Board will enhance oversight and provide greater accountability.
Carl C. Icahn, Chesapeakes second largest shareholder, said, We appreciate the Boards willingness to listen to shareholders and to respond appropriately. Under Aubreys leadership, Chesapeake has assembled great assets and I am confident I can help the Company create significant shareholder value from these assets. We enjoyed a very good relationship when I acquired almost 6% of the Companys stock in late 2010 and I look forward to a similarly constructive relationship now.
Chesapeake Energy Corporation (NYSE:CHK) is the second-largest producer of natural gas, a Top 15 producer of oil and natural gas liquids and the most active driller of new wells in the U.S. Headquartered in Oklahoma City, the companys operations are focused on discovering and developing unconventional natural gas and oil fields onshore in the U.S. Chesapeake owns leading positions in the Marcellus, Haynesville, Bossier, and Barnett natural gas shale plays and in the Eagle Ford, Utica, Mississippi Lime, Granite Wash, Cleveland, Tonkawa, Niobrara, Bone Spring, Avalon, Wolfcamp and Wolfberry unconventional liquids plays. The company has also vertically integrated its operations and owns substantial marketing, midstream and oilfield services businesses directly and indirectly through its subsidiaries Chesapeake Energy Marketing, Inc., Chesapeake Midstream Development, L.P. and Chesapeake Oilfield Services, L.L.C. and its affiliate Chesapeake Midstream Partners, L.P. (NYSE:CHKM). Further information is available at www.chk.com where Chesapeake routinely posts announcements, updates, events, investor information, presentations and news releases.
This news release includes forward-looking statements that give Chesapeakes current expectations or forecasts of future events. Although we believe the expectations and forecasts reflected in our forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties, and actual results may differ from the expectation expressed. We caution you not to place undue reliance on our forward-looking statements, which speak only as of the date of this news release, and we undertake no obligation to update this information.
Additional Information and Where to Find It
On May 11, 2012, the company filed a definitive proxy statement with the Securities and Exchange Commission in connection with its 2012 annual meeting of shareholders. INVESTORS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT, WHICH CONTAINS IMPORTANT INFORMATION. You may obtain the definitive proxy statement as well as other relevant documents, free of charge, at the website maintained by the SEC at www.sec.gov. Copies of the proxy statement and other filings made by the company with the SEC can also be obtained, free of charge, at www.chk.com.
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