HOUSTON (Reuters) - When SandRidge Energy Inc (N:SD) shareholders on Tuesday cast their votes for directors, the only question is how much sway over the embattled oil and gas producer they will hand to activist investor Carl Icahn.
Icahn, whose hedge fund owns 13.6 percent of SandRidge and has said it could make an all-cash offer for the company, is assured of at least two of the seven seats under the formula set by the board and is expected to receive more. He is staking his reputation by pushing for a straight vote on his seven-person slate to manage a sale of the $544 million company after setbacks at Chesapeake Energy Corp (N:CHK).
The investor could win three or four seats with the support of many of its largest shareholders, activists or distressed company investors, said David Beard, analyst at Coker Palmer Institutional.
Institutions including Icahn's hedge fund hold 88 percent of the company's stock, according to Thomson Reuters data, including Fir Tree Partners, Paulson & Co, Guggenheim Capital and Apollo Capital.
Icahn was not available for immediate comment.
SandRidge offered itself for sale after Icahn blasted what he called its "nonsensical" deal to acquire Bonanza Creek Energy (N:BCEI). That deal collapsed, leading to the ouster of SandRidge's chief executive and finance chief.
On Friday, SandRidge said 17 potential bidders including Icahn were preparing to view confidential financial data. The stock, which is off 26 percent this year to date, rose slightly to $15.44 on Friday.
It has attacked Icahn's board slate in a series of shareholder letters, arguing his losses from $7 billion in past energy company investments total $540 million. Icahn wants to "gain control of SandRidge without paying an appropriate premium," it said.
Icahn has support for three board seats from proxy advisors Institutional Shareholder Services and Glass Lewis & Co.
The larger number would provide the billionaire "with a strong presence on the board, but without granting an outright majority to a shareholder who is admittedly part of an ongoing sale process," wrote ISS on June 6.
SandRidge would already have been sold if there was strong demand for its assets, which are largely in high-cost oilfields and in decline, said Coker Palmer's Beard. It could take years to turn around the business no matter who wins the contest, he said.
"Whether he wins two seats or all the seats, there is no magic switch that he can flip to drive shareholder value in the short term," said Beard.