Hedge fund TPG-Axon said on Friday it will solicit support from other shareholders of SandRidge Energy Inc (SD.N) to replace the company's board of directors, citing poor management of the U.S. oil and gas company.
SandRidge Energy has come under fire this month from large shareholders TPG-Axon and Mount Kellett Capital Management who, citing the company's long-term underperformance, are demanding significant changes including the ouster of SandRidge Chief Executive Tom Ward.
"We do not believe that management's track record suggests great vision and wisdom; rather it has been marked by reckless and chaotic behavior," TPG founder Dinakar Singh wrote in a letter to SandRidge's board on Friday.
TPG-Axon, which owns 6.5 percent of SandRidge, also in the letter repeated its call for the company to consider an outright sale.
Earlier this month, TPG-Axon sent a letter to SandRidge that urged Ward to step down and called on the board to consider a sale. Mount Kellett, which owns about 4.5 percent of the company, has also urged the ouster of Ward and an outright sale.
SandRidge has received TPG-Axon's letter and is reviewing it, the company said.
"As we've said previously, we are in regular dialogue with our investors and focused on improving performance and building value for our shareholders," a SandRidge spokesman wrote in an email.
Management problems cited by TPG-Axon include overspending on oil and gas properties and high debt levels as well as SandRidge's "extraordinarily high level of corporate overhead," two factors that hurt shareholder value, TPG-Axon wrote in Friday's letter.
TPG-Axon will also seek support from other shareholders to de-stagger the terms of SandRidge's board of directors, it said. Any change would require the approval of 51 percent of SandRidge's shareholders.
Shares of SandRidge were up 4.4 percent at $5.92 on Friday afternoon on the New York Stock Exchange.
(Additional reporting by Ernest Scheyder in New York; editing by Gerald E. McCormick, Jeffrey Benkoe and Matthew Lewis)