Icahn buys Chesapeake stake

Associated Press

NEW YORK

Activist investor Carl Icahn has taken a sizable stake in Chesapeake Energy Corp. and is calling for at least four of the company’s directors to be replaced.

Icahn spent about $785 million to buy 50.1 million shares, or 7.6 percent, of the second-largest U.S. natural-gas producer.

The billionaire investor’s stock buy was disclosed in a regulatory filing Friday. It comes as Chesapeake has been hit hard by falling natural-gas prices. It also is being criticized for allowing CEO Aubrey McClendon to borrow money from companies that do business with Chesapeake and allowing him the perk of buying personal stakes in company wells.

McClendon gave up his post as chairman May 1 after reports of his financial dealings were made public. Investors have expressed concerns that the transactions could have influenced the company’s business decisions. McClendon said he borrowed $846 million in principal, with some of the loans coming from companies that were planning to buy Chesapeake assets.

Chesapeake is looking for a non- executive chairman, and Icahn said shareholders need to have input on that decision.

Icahn said he recently met with McClendon and asked him to consider direct shareholder representation on the board. Icahn said Chesapeake Energy refused to consider the suggestion.