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Transocean board hits back at Icahn's strategy proposals

Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference at the New York Stock Exchange in this June 27, 2007 fi
Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference at the New York Stock Exchange in this June 27, 2007 fi

(Reuters) - The board of Transocean Ltd hit back at billionaire Carl Icahn in response to the activist investor's demands for a larger dividend and directors charged with pursuing what the offshore driller called his "short-term strategy."

Icahn, who owns 5.6 percent of Transocean, has spent two months campaigning for a dividend of $4 per share. Earlier this month, Transocean recommended that shareholders approve a $2.24 per share dividend.

In the board's first formal response to Icahn's proposals, it said on Sunday his "highly flawed" agenda was focused on temporary returns at the expense of long-term value, and ignored the cyclical and capital-intensive nature of the industry.

The dividend proposal was in "direct conflict with Transocean's disciplined capital allocation strategy," it added.

Icahn also wants Transocean to replace its directors, including the chairman, and is proposing his own nominees.

Transocean's annual meeting is scheduled for May 17 in Switzerland.

(Reporting by Braden Reddall in San Francisco; Editing by Daniel Magnowski)

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