NEW YORK (Reuters) - Energen Corp on Tuesday sought guidance from an Alabama court on the state’s shareholder rights laws which an activist investor had said it would use to force a sale of the U.S. oil and gas producer, a regulatory filing shows.
Corvex Management, a $5.5 billion hedge fund run by Keith Meister, has waged a public campaign since May aimed at making Energen put itself on the auction block to help bolster its lagging stock price, a position echoed by hedge fund Elliott Management.
Energen’s assets are concentrated in the Permian Basin in Texas and New Mexico, where valuations have soared in the last two years as investors seek acreage in the low-cost production area to offset low oil prices. However, Energen, which has a market value of $5.1 billion, has traded at a discount to its peers.
Energen’s management has said the Birmingham, Alabama-based company would follow its existing business plan.
Corvex said last month its 10.1 percent stake passed the threshold needed for shareholders of Alabama-domiciled firms to call a special shareholder meeting at which it would seek approval to expand the board to 15 members from nine, with all new directors being Corvex nominees.
In the filing, Energen disputed Corvex’s stance on the special meeting under both Alabama law and its own articles of association, and said it had asked the Circuit Court of Jefferson County to adjudicate on the matter.
“It is important for this issue to be resolved in order for Energen to determine how to proceed without taking or permitting actions inconsistent with law and Energen’s governing documents,” the filing said.
Corvex, Energen’s biggest shareholder, did not immediately respond to a request for comment.
The fund has often used proxy fights to press for changes at companies. In its latest battle, Corvex nominated an entire slate of directors at Williams Companies Inc last fall, a contest the fund dropped after the oil and gas producer added new members to its board.
In a 2014 proxy fight, Corvex was among the investors that ousted the entire board of CommonWealth REIT.
Energen shares closed 2.1 percent higher at $51.12 on the New York Stock Exchange.
Reporting by Michael Flaherty and David French in New York; Editing by Richard Chang