UPDATE 2-Carl Icahn hikes stake in Chesapeake Energy to 8.9 pct

Tue Nov 20, 2012 3:18pm EST

Nov 20 (Reuters) - Billionaire investor Carl Icahn, the second-largest shareholder in Chesapeake Energy Corp, has raised his stake in the U.S. oil and gas company to 8.9 percent, a regulatory filing shows.

Icahn and investor Mason Hawkins, who owns 13.5 percent of Chesapeake, took control of the company's nine-member board of directors in June in an effort to shore up its finances and deal with a governance crisis.

The new board is contemplating strategies to reduce spending and debt, but nothing has been announced so far. The company's third quarter earnings report showed debt rising to $16 billion and investors were disappointed when the company said some expected deal closings may be pushed into next year.

"Chesapeake delivered solid operational results in the third-quarter, but remains short of capital and allowed some planned asset sales to slip to 2013," analysts at Raymond James said in a note to clients.

Icahn and Hawkins are "likely to require a more disciplined approach to fundraising and spending," the analysts said.

Through the third quarter, Chesapeake had closed or announced $12 billion in deals for oil and gas properties. Asset sales are needed to help close a 2012 funding shortfall that some analysts projected at $10 billion.

Icahn, who did not respond to a request for comment, previously reported a 7.56 percent stake in the company.

Analysts at Robert W. Baird speculated that Icahn saw a bargain and bought more because Chesapeake's shares have down 18 percent from the year's high of $21.58 hit in October.

Shares of Chesapeake rose 17 cents, or nearly 1 percent, to $17.64 in afternoon New York Stock Exchange trading.

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