0000902664-05-000785.txt : 20120703
0000902664-05-000785.hdr.sgml : 20120703
20050310172700
ACCESSION NUMBER: 0000902664-05-000785
CONFORMED SUBMISSION TYPE: SC 13D/A
PUBLIC DOCUMENT COUNT: 2
FILED AS OF DATE: 20050310
DATE AS OF CHANGE: 20050310
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: KERR MCGEE CORP /DE
CENTRAL INDEX KEY: 0001141185
STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311]
IRS NUMBER: 731612389
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D/A
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-78007
FILM NUMBER: 05673301
BUSINESS ADDRESS:
STREET 1: KERR-MCGEE CENTER
STREET 2: 123 ROBERT S. KERR AVENUE
CITY: OKLAHOMA CITY
STATE: OK
ZIP: 73102
BUSINESS PHONE: 4052701313
MAIL ADDRESS:
STREET 1: KERR-MCGEE CENTER
STREET 2: P.O. BOX 25861
CITY: OKLAHOMA CITY
STATE: OK
ZIP: 73125
FORMER COMPANY:
FORMER CONFORMED NAME: KERR MCGEE HOLDCO INC
DATE OF NAME CHANGE: 20010525
FORMER COMPANY:
FORMER CONFORMED NAME: KING HOLDCO INC
DATE OF NAME CHANGE: 20010523
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: JANA PARTNERS LLC
CENTRAL INDEX KEY: 0001159159
IRS NUMBER: 000000000
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D/A
BUSINESS ADDRESS:
STREET 1: JANA PARTNERS LLC
STREET 2: 536 PACIFIC AVENUE
CITY: SAN FRANCISCO
STATE: CA
ZIP: 94133
BUSINESS PHONE: 2125935955
SC 13D/A
1
srz05-0353kerr.txt
KERR-MCGEE CORPORATION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
SCHEDULE 13D/A*
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
Under the Securities Exchange Act of 1934
(Amendment No. 1)
Kerr-McGee Corporation
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $1.00 per share
--------------------------------------------------------------------------------
(Title of Class of Securities)
492386107
--------------------------------------------------------------------------------
(CUSIP Number)
Marc Weingarten, Esq.
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
(212) 756-2000
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 10, 2005
--------------------------------------------------------------------------------
(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 Rule 13d-1(e), 13d-1(f) or 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.
(Continued on following pages)
(Page 1 OF 6 PAGES)
__________________________
* The remainder of this cover page shall be filled out for a reporting
person's 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).
------------------------------ ---------------------
CUSIP NO. 492386107 SCHEDULE 13D/A PAGE 2 OF 6 PAGES
------------------------------ ---------------------
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JANA PARTNERS LLC
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
4,332,400 (including options to purchase up to
1,531,300 Shares) (see Item 5)
----------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY -0-
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 4,332,400 (including options to purchase up to
1,531,300 Shares) (see Item 5)
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
4,332,400 (including options to purchase up to 1,531,300 Shares)
(see Item 5)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[x]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.9% (see Item 5)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IA
--------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
------------------------------ ---------------------
CUSIP NO. 492386107 SCHEDULE 13D/A PAGE 3 OF 6 PAGES
------------------------------ ---------------------
The Schedule 13D filed on March 3, 2005 by Jana Partners LLC, a Delaware
limited liability company (the "Reporting Person"), relating to the common
stock, $1.00 par value (the "Shares"), of Kerr-McGee Corporation (the "Issuer"),
is hereby amended and supplemented as set forth below by this Amendment No. 1
to the Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 of the Schedule 13D is hereby amended and restated as follows:
Of the 4,332,400 Shares reported herein by the Reporting Person,
2,801,100 Shares were acquired at an aggregate purchase price of approximately
$174,730,022.67, and the remaining 1,531,300 Shares represent options to acquire
Shares, which options were acquired at an aggregate purchase price of
approximately $4,236,878.37. The Shares beneficially owned by the Reporting
Person were acquired with investment funds in accounts under management.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 of the Schedule 13D is hereby supplemented as follows:
On March 10, 2005, the Reporting Person and the Icahn Group sent a
letter to the Issuer regarding their proposal to increase stockholder value. A
copy of the letter is attached hereto as Exhibit C and is incorporated herein by
reference.
SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS
RELATED TO SOLICITATION OF PROXIES BY JANA PARTNERS LLC AND ITS AFFILIATES FROM
THE STOCKHOLDERS OF KERR-MCGEE CORPORATION FOR USE AT ITS ANNUAL MEETING WHEN
AND IF THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION,
INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN ANY SUCH PROXY
SOLICITATION. WHEN AND IF COMPLETED, THE PROXY STATEMENT AND SUCH OTHER
DOCUMENTS WILL BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE
COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV, AND A DEFINITIVE PROXY STATEMENT AND
A FORM OF PROXY WILL BE MAILED TO STOCKHOLDERS OF KERR-MCGEE CORPORATION.
ITEM 5. INTEREST IN SECURITIES OF THE COMPANY.
Items 5(a) and 5(b) of the Schedule 13D are hereby amended and restated as
follows:
(a) The aggregate percentage of Shares reported to be beneficially
owned by the Reporting Person is based upon 151,692,157 Shares outstanding,
which is the total number of Shares outstanding as reported in the Issuer's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2004.
As of the close of business on March 9, 2005, the Reporting Person may
be deemed to beneficially own 4,332,400 Shares (including options to purchase up
to 1,531,300 Shares), constituting approximately 2.9% of the Shares outstanding.
Upon information and belief, the Icahn Group, as of the close of business on
March 9, 2005, may be deemed to beneficially own 7,106,000 Shares. Accordingly,
the 11,438,400 Shares that may be deemed to be beneficially owned in the
aggregate by the Reporting Person and the Icahn Group, as of the close of
business on March 9, 2005, constitutes approximately 7.5% of the Shares
outstanding.
(b) The Reporting Person has sole voting and dispositive powers over
the 4,332,400 Shares reported herein (including, if such options are exercised,
the 1,531,300 Shares underlying the options reported herein), which powers are
exercised by the Principals.
------------------------------ ---------------------
CUSIP NO. 492386107 SCHEDULE 13D/A PAGE 4 OF 6 PAGES
------------------------------ ---------------------
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE COMPANY.
Item 6 of the Schedule 13D is hereby amended and restated as follows:
As set forth below, the Reporting Person holds, as of the close of
business on March 9, 2005, options to acquire 1,531,300 Shares, each of which
was acquired on the open market:
Shares
Date of Underlying Exercise Price Purchase Price
Purchase Options per Share ($) Expiration Date per Option ($)
-------------------------------------------------------------------------------
02/07/05 49,000 65.00 03/18/05 1.1859
02/08/05 100,000 65.00 03/18/05 1.3357
02/22/05 1,000 75.00 03/18/05 2.2555
02/28/05 73,300 80.00 04/15/05 2.0558
03/01/05 225,700 80.00 03/18/05 1.5288
03/01/05 211,000 80.00 03/18/05 1.0594
03/01/05 226,900 75.00 03/18/05 3.8579
03/01/05 100,000 80.00 04/15/05 2.7408
03/02/05 272,100 75.00 03/18/05 5.2532
03/02/05 126,900 80.00 04/15/05 3.1693
03/02/05 118,300 80.00 03/18/05 2.2253
03/02/05 1,000 65.00 03/18/05 13.5285
03/04/05 26,100 80.00 03/18/05 2.5238
As more fully described in Item 4, pursuant to discussions among the
Reporting Person and the Icahn Group, on March 2, 2005 the Icahn Group notified
the Issuer that it proposed to nominate Barry Rosenstein and Carl Icahn for
election to the Issuer's board of directors at the 2005 annual meeting of
stockholders. Representatives of the Reporting Person and the Icahn Group have
suggested various actions to the Issuer that they believe would enhance
stockholder value. The Reporting Person currently intends to solicit proxies in
favor of Messrs. Rosenstein and Icahn should the Issuer not take satisfactory
measures in pursuit of stockholder value.
Except as otherwise set forth herein, the Reporting Person does not have
any contract, arrangement, understanding or relationship with any person with
respect to securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 of the Schedule 13D is hereby supplemented as follows:
3. Exhibit C - Letter to the Issuer dated March 10, 2005.
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CUSIP NO. 492386107 SCHEDULE 13D/A PAGE 5 OF 6 PAGES
--------------------------- -------------------
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 10, 2005
JANA PARTNERS LLC
By: /s/ Barry S. Rosenstein
---------------------------
Name: Barry S. Rosenstein
Title: Managing Director
By: /s/ Gary Claar
---------------------------
Name: Gary Claar
Title: Managing Director
--------------------------- -------------------
CUSIP NO. 492386107 SCHEDULE 13D/A PAGE 6 OF 6 PAGES
--------------------------- -------------------
EXHIBIT INDEX
1. Exhibit A - Letter to the Issuer dated March 3, 2005 (previously filed).
2. Exhibit B - Transactions in the Shares by the Reporting Person during the
past 60 days (previously filed).
3. Exhibit C - Letter to the Issuer dated March 10, 2005.
EX-99
2
exh99.txt
EXHIBIT C
ICAHN PARTNERS LP
ICAHN PARTNERS MASTER FUND LP
HIGH RIVER LIMITED PARTNERSHIP
JANA PARTNERS LLC
March 10, 2005
VIA FEDERAL EXPRESS AND FACSIMILE
----------------------------------
Mr. Luke R. Corbett
Chairman and Chief Executive Officer
Kerr-McGee Corporation
123 Robert S. Kerr Avenue
Oklahoma City, Oklahoma 73102
Dear Mr. Corbett:
We are writing in response to the March 8th announcement by Kerr-McGee
Corporation ("KMG") regarding the board's decision to approve the sale of KMG's
chemicals business and the repurchase of $1 billion of shares. We are encouraged
that KMG agrees with our position with respect to the sale of its chemicals
business. However, the board did not address the substance of our proposal -
taking advantage of the significant arbitrage opportunity we outlined. We have
spoken with several of KMG's largest shareholders, and we found that each
believes that:
o KMG should not miss the opportunity to LOCK IN HIGH OIL PRICES;
o KMG should STOP WASTING MONEY ON HIGH-RISK EXPLORATION; and
o KMG should RETURN MORE MONEY TO SHAREHOLDERS IMMEDIATELY.
We continue to believe that if KMG were to consummate the VPP transaction
described in our March 3rd letter, it would unlock significant shareholder
value. Furthermore, contrary to KMG's mischaracterization of our proposal, we
are not seeking "quick cash." As such, given current market conditions, if KMG
were to consummate the VPP transaction we proposed and commence a tender offer
(as opposed to an uncertain and open-ended buy back such as that approved by the
board) to repurchase its shares at $90 per share, WE WOULD COMMIT NOT TO SELL
OUR SHARES IN SUCH AN OFFER.
KMG has expressed concern that returning capital to its shareholders would
limit its ability to conduct exploratory drilling activities. That is exactly
our point - we believe KMG can spend its money much more judiciously than to
continue spending money on high-risk exploration. Extrapolating from your public
filings, we see that KMG's 3-year historic average exploration costs through the
drill bit (including revisions) are approximately $40 per boe (excluding
Westport and other acquisitions). At its current share price (and assuming a
value for the chemicals business within management's estimated range), KMG now
has the opportunity to repurchase its own shares and thereby repurchase its own
reserves at between $11 and $12 per boe.
We believe that KMG has destroyed shareholder value through its
exploratory activities over the last three years. We do not seem to be alone in
our opinion. In addition to the several large KMG shareholders with whom we have
spoken, Goldman Sachs, in a research report released on March 7th, stated as
follows:
"Our concern with Kerr-McGee's current E&P business model is
that its strategy of trying to offset the steep declines inherent in
its mature, short-lived core E&P asset base does not appear to be a
good fit with a high-risk deepwater exploration strategy. If allowed
to continue, WE SEE A HIGH LIKELIHOOD THAT KERR-MCGEE COULD SQUANDER
THE BENEFITS OF HIGH OIL PRICES. . . . We believe that the most
attractive solution would be for Kerr-McGee to "produce out" its E&P
reserves. Given our view that Kerr-McGee's E&P business is capable
of generating substantial cash flow, THE KEY TO UNLOCKING THE VALUE
WOULD BE TO SPEND MINIMAL AMOUNTS OF CAPEX, ESSENTIALLY DEPLETE OUT
ITS RESERVES OVER TIME, AND RETURN REMAINING CASH FLOWS BACK TO THE
SHAREHOLDERS. We believe Kerr-McGee could choose to take advantage
of currently high commodity forward prices to lock in value for its
reserves. "1 (emphasis added)
KMG's board should be focused on maximizing value for its shareholders,
the constituency to whom the board owes its fiduciary duties. We are dismayed
that KMG has chosen to make dismissive public statements instead of taking
seriously our proposal for enhancing shareholder value. To resort to meaningless
rhetoric is wasteful, just as, unfortunately for shareholders, we believe much
of KMG's exploratory drilling activity has been. Although we believe that a
proxy fight would be a debilitating exercise for all involved, if KMG continues
to ignore what we believe is the obvious way to unlock shareholder value, we
will press forward to seek to elect the undersigned to the board at the upcoming
annual meeting of shareholders. Further, if oil prices were to decline and KMG
were to miss the significant and unique arbitrage opportunity that currently
exists, management and the board will be responsible for having destroyed
shareholder value.
Very truly yours,
CARL C. ICAHN
BARRY ROSENSTEIN
SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS
RELATED TO SOLICITATION OF PROXIES BY MESSRS. CARL ICAHN AND BARRY ROSENSTEIN
AND THEIR RESPECTIVE AFFILIATES FROM THE STOCKHOLDERS OF KERR-MCGEE CORPORATION
FOR USE AT ITS ANNUAL MEETING WHEN AND IF THEY BECOME AVAILABLE, BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE
PARTICIPANTS IN ANY SUCH PROXY SOLICITATION. WHEN AND IF COMPLETED, THE PROXY
STATEMENT AND SUCH OTHER DOCUMENTS WILL BE AVAILABLE AT NO CHARGE AT THE
SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV, AND A
DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY WILL BE MAILED TO STOCKHOLDERS OF
KERR-MCGEE CORPORATION.
--------
1 We have not received, nor have we sought, permission from Goldman Sachs to
publish excerpts from this research report.