Transocean And Carl Icahn Strike An Accord; Analysts See Limited Upside

On Monday November 11th, Transocean Ltd RIG reached an agreement with famed corporate raider Carl Icahn. Shares of Transocean have been trading up over 3 percent following the pre-market news release. Transocean is set to pay a $3 dividend which will benefit Icahn, who is the company's third largest shareholder. The proposed dividend will be voted on next year, and if approved will total $1.08 billion. The stock can reach $60 assuming shares trade at 5 percent yield on the proposed $3 dividend, according to a Bernstein analyst. The firm's Scott Gruber said in a research note he is anticipating limited upside past $60 amid catalysts which have been mostly "exhausted." Icahn has taken an activist role in the Switzerland based company since January saying it had been involved in “ill-advised mergers, employed unsuccessful development strategies and squandered the substantial cash flow.”