Re: CHK damage control
Meanwhile, there is a lot of speculation whether Aubrey gets fired or not. That probably doesn't matter very much. Between Icahn and Southeastern, Aubrey is being made somewhat irrelevant. Enough of the board has changed that an asset sale process will go a lot further than what Aubrey would prefer. He will probably go along with it so that he can keep his job as CEO of a stripped down CHK. It is better to be a king of some small province than be deposed from the throne of a grand country.
Item 4. Introduction
Southeastern's Schedule 13D's filed May 2 and 7, 2012 are incorporated herein
by reference and are supplemented with the following additional information.
At the 2012 Annual Meeting of Shareholders, Southeastern voted against both
directors up for election, Richard Davidson and Burns Hargis. However, we would
be supportive of Mr. Hargis' resignation not being accepted by the Board until
the Audit Committee, which he chairs, completes the Board review currently
underway. We would anticipate this review being completed as quickly as
possible, although it needs to be handled appropriately. We are hopeful that
this review can be completed in a matter of weeks not months. This timing
change would not impact the election of the three directors we will be
recommending as laid out in the company press release this past Monday.
We applaud this morning's announced sale of the midstream assets. As laid out
in our Schedule 13D dated May 7, 2012, we urged the move not just to
strengthen the balance sheet but also to reduce future capital spending. We
are pleased that the company has moved so quickly to increase its financial
flexibility, and support management's intentions to monetize other meaningful
non-core assets not recognized in today's share price. We believe that
management and the soon-to-be reconstituted board will vigilantly prioritize
and pursue these and other value-creating opportunities.
Item 5. Interest In Securities Of The Issuer
(a) The aggregate number and percentage of Securities to which this
Schedule 13D relates is 92,025,094 shares of the common stock of the Issuer,
constituting approximately 13.9% of the 662,343,738 shares outstanding. This
amount includes 4,569,199 in Securities underlying shares in the following
convertible preferred stock:
73,420 shares 5.75% (cusip 165167776)
51,680 shares 5.75% (cusip 165167784)
Common % of outstanding
Shares Common Shares
Held
___________________________________________________________________
Voting Authority
Sole: 51,938,249* 7.8%
Shared: 31,131,173** 4.7%
None: 8,955,672 1.4%
Total 92,025,094 13.9%
*This amount includes 848,602 in Securities underlying shares in convertible
preferred stock.
**Consists of shares owned by Longleaf Partners Fund, a series of Longleaf
Partners Funds Trust, an open-end management investment company registered
under the Investment Company Act of 1940. This amount includes 3,720,597 in
Securities underlying shares in convertible preferred stock.
Dispositive Authority
Sole: 60,893,921* 9.2%
Shared: 31,131,173** 4.7%
None: 0 0.0%
Total 92,025,094 13.9%
*This amount includes 848,602 in Securities underlying shares in convertible
preferred stock.
**Consists of shares owned by Longleaf Partners Fund, a series of Longleaf
Partners Funds Trust, an open-end management investment company registered
under the Investment Company Act of 1940. This amount includes 3,720,597 in
Securities underlying shares in convertible preferred stock.
(b) Southeastern generally has the sole power to dispose of or to
direct the disposition of the Securities held for discretionary accounts of its
investment clients, and may be granted the sole power to vote or direct the
vote of such Securities; such powers may be retained by or shared with the
respective clients for shared or non-discretionary accounts. Shares held by
any Series of Longleaf Partners Funds Trust are reported in the "shared"
category.
(c) Purchase or sale transactions in the Securities during the past
sixty days are disclosed on Schedule II.
(d) The investment advisory clients of Southeastern have the sole
right to receive and, subject to notice, to withdraw the proceeds from the sale
of the Securities, and the sole power to direct the receipt of dividends from
any of the Securities held for their respective accounts. Such clients may
also terminate the investment advisory agreements without penalty upon
appropriate notice. Southeastern does not have an economic interest in any of
the Securities reported herein.
(e) Not applicable.
Signatures
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: June 8, 2012
Southeastern Asset Management, Inc.
By /s/ Andrew R. McCarroll
_______________________________________________
Andrew R. McCarroll
Vice President and General Counsel
O. Mason Hawkins, Individually
/s/ O. Mason Hawkins
_______________________________________________
Joint Filing Agreement
In accordance with Rule 13d-1(k) under the Securities Exchange Act
of 1934, the persons or entities named below agree to the joint
filing on behalf of each of them of this Initial Schedule 13D with
respect to the Securities of the Issuer and further agree that this
joint filing agreement be included as an exhibit to this Initial to
Schedule 13D. In evidence thereof, the undersigned hereby execute
this Agreement as of June 8, 2012.
Southeastern Asset Management, Inc.
By /s/ Andrew R. McCarroll
_______________________________________________
Andrew R. McCarroll
Vice President and General Counsel
O. Mason Hawkins, Individually
/s/ O. Mason Hawkins
_______________________________________________ |
