WHEN: TODAY, WEDNESDAY, OCTOBER 3RD
WHERE: CNBC’S “CLOSING BELL”
Following is the unofficial transcript of breaking news from CNBC’s Kate Kelly. All references must be sourced to CNBC.
KATE KELLY: SO SOME DETAILS ON DAN LOEB’S POSITION IN MURPHY OIL WHICH WAS FIRST MENTIONED LAST NIGHT ALTHOUGH PEOPLE REALLY DIDN’T KNOW WAS IT A LONG WAS IT A SHORT WAS IT EVEN SOME SORT OF DERIVATIVES EXPOSURE. IT IS A LONG AND IT LOOKS AS THOUGH DAN MIGHT ACTUALLY BE LOOKING TO GO ACTIVE. THE COMPANY APPARENTLY OWNS NOT QUITE 5% OF A POSITION IN MURPHY OIL BUT I AM TOLD THE SIZE OF IT IS SIGNIFICANT. IT MAY BE CLOSE TO 5% OR IT WILL BE SOON. THEY HAVE FILED FOR HART-SCOTT RODINO CLEARANCE TO INCREASE THE SIZE OF THEIR POSITION IF THEY WOULD LIKE TO WHICH OF COURSE IS A SIGNAL THAT THEY MAY WANT TO GO ACTIVE. NOW SOME INTERESTING LANGUAGE IN DAN LOEB’S INVESTOR LETTER WHICH I UNDERSTAND IS BEING DISTRIBUTED AS WE SPEAK TO INVESTORS. THEY ESSENTIALLY SAY THAT WE INITIATED OUR INVESTMENT FOLLOWING A THREE YEAR PERIOD IN WHICH MURPHY SHARE PRICE DECLINED BY 15% WHILE SOME COMPS WERE MUCH BETTER OFF. WE BELIEVE THIS LAGGING PERFORMANCE CAN BE EXPLAINED PARTIALLY BY MURPHY’S DISPARATE ASSETS BASE WHICH MAKES THE COMPANY COMPLEX AND VERY HARD TO VALUE. THEY HAVE A NUMBER OF SUGGESTIONS WHICH I UNDERSTAND THEY’VE SHARED WITH MANAGEMENT AS TO HOW THEY CAN IMPROVE VALUE. FOR ONE THING AND THIS IS A KEY ISSUE FOR LOEB I THINK THEY WANT MURPHY TO SPIN OFF THEIR RETAIL BUSINESS AND SEPARATE IT FROM THEIR E&P BUSINESS. THEY ALSO WANT THEM TO SELL THEIR CANADIAN NATURAL GAS ASSETS I AM TOLD. ANOTHER THING WOULD BE TO SELL THEIR 5% STAKE IN THE SYNCRUDE OIL SANDS PROJECT. AND FINALLY TO COMPLETE THE UK REFINING BUSINESS EXIT WHICH IS ALREADY UNDERWAY. SO I AM TOLD THERE IS SOME DIALOGUE BILL BETWEEN THIRD POINT AND MURPHY OIL ALREADY BUT WHO KNOWS WHETHER THE TWO SIDES ARE GOING TO AGREE WHAT THE PLAN IS. IT COULD TURN INTO THE NEXT YAHOO SITUATION WHICH I AM SURE PEOPLE REMEMBER WENT WELL. LOEB WENT ACTIVE ON THEM AND MANAGEMENT ENDED UP CHANGING OVER AND LOEB AND SEVERAL OF HIS COUNTERPARTS ARE ON THE BOARD NOW.
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