Transocean stock up as Icahn buys stake

Transocean stock rose 3 percent Monday on news that billionaire investor Carl Icahn bought a minor stake in the oil drilling company, Transocean.

Mark Lennihan/AP/File
In this October 2007 file photo, private equity investor Carl Icahn speaks at the World Business Forum in New York. Transocean stock rose Monday when it was revealed that the billionaire investor purchased a 1.56 percent stake in the company.

 Shares of Transocean rose 3 percent in morning trading on Monday after it disclosed that billionaire investor Carl Icahn purchased a 1.56 percent stake in the oil drilling company and may want to buy more.

Swiss-based Transocean owned the Deepwater Horizon drilling rig which exploded and sank in the Gulf of Mexico in 2010, triggering the nation's worst offshore oil spill. The company recently reached a plea agreement with the Justice Department over its role in the massive oil spill.

Icahn is known for buying stakes in struggling companies and shaking them up.

In disclosing the Icahn stake, Transocean also said in a regulatory filing with the Securities and Exchange Commission that Icahn is looking to obtain regulatory approval to potentially buy additional shares worth more than $682.1 million.

If he gets approval, he could become one of Transocean's biggest shareholders with about a 5 percent stake. The company's largest stockholder is currently Capital Research & Management, with a 5.12 percent stake, according to FactSet.

Transocean leased the Deepwater Horizon drilling rig to BP PLC. The rig sank after an explosion killed 11 workers and triggered the spill. The April 2010 blowout of BP's Macondo well spewed more than 200 million gallons of oil into the Gulf.

At a brief hearing last week before a federal magistrate in New Orleans, Transocean attorneys didn't enter a plea on the company's behalf to a misdemeanor charge of violating the Clean Water Act.

Transocean has agreed to pay $400 million in criminal penalties, plead guilty to the charge and pay $1 billion in civil penalties. It isn't expected to enter the plea until next month.

U.S. District Judge Jane Triche Milazzo has scheduled a Feb. 14 hearing to decide whether to accept the criminal settlement. Milazzo only presides over the criminal settlement. A different judge will decide whether to accept Transocean's civil settlement with the federal government.

Transocean can withdraw from its plea deal if Milazzo rejects it.

Transocean Ltd.'s stock added $1.58, or 2.9 percent, to $55.67 in morning trading Monday. Its shares fell as low as $39.32 in early June and as high as $59.03 in mid-March.

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