Meistner's Corvex Management Reveals 5.5% Stake in Energen

May 31 2017 | 9:36pm ET

Keith Meister's activist hedge fund Corvex Management LP has disclosed a 5.5% stake in Energen Corp and has called for a possible sale of the global oil and gas producer. 

Corvex has held discussions with management about maximizing shareholder value, the company said in a securities filing, noting that despite “some of the most attractive leaseholds for oil and gas development in the Permian Basin,” Energen’s operational and financial performance has fallen short of its peers. 

The Permiam Basin in West Texas is home to the largest U.S. oil deposits and has become a focal point of M&A activity as energy firms attempt to take advantage of higher oil prices. 

Accordingly, Corvex in the regulatory filing that Energen “needs to strongly consider what actions can be taken to enhance and maximize shareholder value – including a review of the potential value delivered to shareholders through a change of control transaction given the recent wave of acquisitions in the Permian Basin at per acre values well in excess of the Issuer’s current implied value.” 

As is often the case when well-known activist investors disclose interest in a large company, Energen's shares rose sharply on Wednesday before closing up 1.3% at $57.04. 

Corvex may not be alone in thinking Energen’s Permian Basin assets might be worth more than the company itself. Hedge funds Elliott Management, Highfields Capital Management, and Balyasny Assset Management all reported increased positions in the Birmingham, Alabama-based company in their most recent 13-F filings with the SEC.

Meister, who founded Corvex in 2011 with $250 million in seed capital from George Soros, was CEO of Icahn Enterprises from 2003 to 2003 and is a protégé of billionaire activist Carl Icahn. The company manages approximately $5.5 billion in mostly equity investments, special situations and distressed securities largely in North America.

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