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 -------------------------------------------------------------------------------- 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 -------------------------------------------------------------------------------- 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. --------------------------- ------------------- 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.