Carl Icahn hikes stake in Chesapeake Energy, seeks board change

Billionaire investor Carl Icahn has raised his stake in US natural gas producer Chesapeake Energy Corp to 7.56 per cent, and has demanded a new slate of directors, saying the company's current board has failed to protect shareholder interests amid its financial problems.

Icahn, known for investing in companies and aggressively calling for change, had bought a 5.8 per cent stake in Chesapeake in December 2010, and this week acquired an additional 1.76 per cent for $785 million.

The 7.56 per cent stake makes Icahn the third-largest shareholder of Chesapeake. Memphis-based investment firm Southeastern Asset Management is the largest with a 13 per cent stake.

In a letter written yesterday to the company's board, Icahn called for replacing four of Chesapeake's nine directors with two of his own candidates and the other two by Southeastern Asset Management.

Icahn has accused Chesapeake's directors of failing to do their jobs by letting the company's founder, CEO and chairman Aubrey McClendon run the company as his personal fiefdom.
Last month reports emerged that McClendon had used personal stakes in the company's wells to obtain more than $1 billion in private loans.

Following shareholder uproar, McClendon gave up his post as chairman on 1May and the company is on the lookout for a chairman and the company said that it would separate the chairmanship and CEO roles.