UPDATE 2-Icahn pushes Transocean for dividend of at least $4/shr

Fri Jan 25, 2013 7:06pm EST

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* Company dropped div last year due to liquidity constraints

* An Icahn dividend proposal can bind with majority vote

* Transocean shares rise 3 pct (Adds Transocean statement, more on Swiss rules for dividend proposal)

By Braden Reddall

Jan 25 (Reuters) - Activist investor Carl Icahn on Friday pushed offshore driller Transocean to declare a dividend of at least $4 per share and said if it does not, he will propose it at the company's next annual meeting, according to a regulatory filing.

Transocean this month disclosed that Icahn held a 1.56 percent stake in the company and was seeking regulatory approval to buy shares worth more than $682 million, making him one of the Switzerland-based company's largest shareholders with a stake of just over 5 percent.

The New York-traded shares of Transocean, which stopped paying a quarterly dividend last year, rose 3 percent in after-hours trading in response to Icahn's demand.

Just hours after verbally sparring on live TV with another prominent investor, Icahn made clear his intentions with Transocean through the purchase of the stake, which he disclosed on Friday amounts to 5.6 percent.

"Under Swiss law and the Issuer's Articles of Association, a shareholder has the right to propose a dividend at a company's annual meeting, and if a majority of shareholders support the proposal, the dividend is declared, whether or not the company's board supports such proposal," Icahn said in the filing with the U.S. Securities and Exchange Commision.

Nothing in the filing should be viewed as an intention to launch or consider a takeover offer for Transocean, Icahn said. But he did plan to talk to the management about business and strategy, as well as the possible addition of shareholder-selected nominees to the board of directors.

"We will review Mr. Icahn's filing carefully and respond in due course," a Transocean spokesman said in an email. "We appreciate the opportunity to hear from our shareholders and look forward to continuing a dialogue with Mr. Icahn."

"As always, the Transocean Board of Directors will set dividend policy on the basis of financial prudence and the best interest of shareholders," he added.

After paying a dividend in 2011 that was its first in nine years, Transocean last year had to abandon quarterly payouts that had totaled $3.16 per share - about $1 billion per year - in order to maintain a strong balance sheet and investment-grade rating on its debt.

The company faced ballooning costs over the past few years as it sought to get its ageing fleet into shape under stricter regulations that followed BP's 2010 Macondo oil spill, which destroyed a Transocean rig and killed 11 people.

Shares of Transocean, owner of the world's largest offshore drilling fleet, have risen more than a fifth since its $1.4 billion settlement with the U.S. government on Jan. 3 over its liability in the Macondo disaster.

Icahn declared his initial stake in the company 10 days later. (Reporting by Braden Reddall in San Francisco and Michael Erman in New York; Editing by Gary Hill, Leslie Adler and Tim Dobbyn)

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