* Icahn still wants $4 per share dividend
* Company plans $2.24 per share payout
* Shares up slightly
March 4 (Reuters) - Activist investor Carl Icahn affirmed plans to propose a $4.00 per share dividend at Transocean Ltd's annual meeting, a day after the world's largest drilling contractor said it will restart payouts at a lower rate.
Icahn, who has been campaigning for a higher payout for over a month, said he would propose the dividend he had suggested in January, at Transocean's annual meeting on May 17, according to a filing with the U.S. Securities and Exchange Commission on Monday.
Transocean's latest plan "further highlights a long track record of weak capital allocation strategy," Icahn said in the filing.
The board has recommended that shareholders approve a $2.24 per share dividend. The total payout would be about $800 million, the company said on Sunday.
After paying a dividend in 2011, its first in nine years, Transocean last year abandoned payouts that totaled $3.16 per share annually, to maintain a strong balance sheet and investment-grade rating on its debt.
On Monday, Chief Financial Officer Esa Ikaheimonen said it would be a stretch for Transocean to launch an initial public offering of a master limited partnership of some of its rigs in 2013 because the process would take about a year to complete.
But he added that Transocean had attractive assets for such a transaction, particularly among its Gulf of Mexico ultra-deepwater fleet.
"The market size is limited so I think up to three ultra-deepwater rigs could potentially be an IPO, and nothing much more than that," Ikaheimonen said in his first quarterly conference call since he was hired from Seadrill last year.
"You will have to wait and see and we will keep you up to date as to when we make progress."
Ikaheimonen had been involved in spinning out an initial group of four rigs from Seadrill into a partnership.
Icahn said he would nominate three directors to Transocean's board who will have experience creating "yield vehicles" and can help the drilling contractor execute an MLP strategy.
The company has struggled with ballooning costs over the past few years as it sought to get its aging fleet into shape under stricter regulations that followed BP's 2010 Macondo oil spill, which destroyed a Transocean rig and killed 11 people.
Transocean reached a $1.4 billion settlement with the U.S. government on Jan. 3 over its liability in the Macondo disaster. Ten days later, Icahn declared his initial stake of about 1.56 percent.
Because of the reduced uncertainty with the Macondo settlement, Ikaheimonen said the company would now seek to maintain total financial liquidity of $3.5 billion to $4.5 billion, down from a previous range of $5 billion to $6 billion.
Switzerland-based Transocean, which has long-term debt of more than $11 billion, plans to accelerate repayment with an objective of retiring $1 billion of debt by the end of 2014.
Transocean on Friday reported revenue growth and a higher-than-expected profit for the quarter that ended Dec. 31, as more of its fleet was working compared with a year ago.
Transocean said its revenue efficiency, or how much it earned compared with what it could have made, rose to 94.7 percent from 91.8 percent in the same quarter in 2011, and it aims to stay at least around 93 percent.
But in the first two months of the first quarter, revenue efficiency had been only around 90 percent due to a previously announced inspection and replacement of bolts on some of its rigs, Ikaheimonen said.
Transocean shares rose 4 cents to $52.19 on the New York Stock Exchange late Monday afternoon, while the Philadelphia oil service index was down about 1 percent.