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Carl C. Icahn Issues Open Letter To Transocean Shareholders

How Can a Company be Trusted to Allocate Capital If They Can't Even Calculate Shareholder Returns

NEW YORK, April 19, 2013 /PRNewswire/ -- Carl C. Icahn today delivered the following open letter to shareholders of Transocean Ltd. 

Dear Fellow Transocean Shareholders:

It is very concerning to us that even under the glaring spotlight of a proxy fight, the management of Transocean can so egregiously misstate the performance of its company, not only to its shareholders, but apparently to the board as well. It is equally worrisome that after all these years the board has so little understanding of the Company that it would accept management's inaccurate version of the facts.  As the largest shareholder of the Company, we are even more troubled by the fact that if management believes they can get away with such egregious disclosure errors, we can only wonder what other misstatements and errors may have been made over the years when they were not under the glaring spotlight of a proxy fight.

On April 15 Transocean proudly heralded their 3 and 5 year stock performance for the periods prior to Macondo, claiming that the Company generated 54% and 171% total returns for these 3 and 5 year periods, respectively.  They even went so far as to brag that the Company has "consistently delivered shareholder returns above the peer group, excluding Macondo."  This statement is a blatant misstatement of the facts.  And so, on April 17, we issued a letter to shareholders pointing out that contrary to the Company's remarkable conclusions, when you actually apply math to the Company's stock performance for these 3 and 5 year periods, the total returns are 4.7% and 73.1%, which are far inferior to their peer group, not the 54% and 171% that the Company claimed. 

Any knowledgeable shareholder of Transocean over the past several years would have immediately known these returns were wrong and would have understood the absurdity of these inaccurate claims.  How is it possible that the board failed to notice and permitted this inaccurate statement to be disclosed to shareholders?  It also makes us wonder how many other mistakes Talbert, Sprague and Cason have made over the years, including the years when Talbert was CEO and managed a company that lost billions of dollars of shareholder value? We firmly believe that the time has come when management should be held accountable, and this board that has failed to hold them accountable, should be replaced.

In our letter we demanded that the Company reconcile their assertions with publicly available information so that all shareholders could understand the basis for the Company's assertions.  On April 18, the Company corrected their misleading information by burying several corrections in a 60 page presentation, but they failed to reassess their conclusions or to issue an affirmative retraction of the previously disclosed material. 

Shockingly, even considering the fact that WE TOLD THEM THE CORRECT NUMBERS, the new numbers are still wrong and continue to mislead shareholders.  For the 3 and 5 year periods, the Company shows total returns of 11% and 84%.  Based on these incorrect numbers, the Company continues to conclude that Transocean outperformed its peers during the applicable periods.  This is just not true.  Despite presiding over an abysmal period, Talbert is still the Chairman and it is time he is held accountable and replaced.  No amount of camouflage or disguise can avoid the obvious.  When the numbers are calculated correctly, Transocean UNDERPERFORMED its peers. 

We started this proxy contest with very little confidence in management and the board; now after these latest errors, we can comfortably say that we have zero confidence.  If the board and management cannot be trusted to know the performance of their company and know when a disclosure being made by management is just absurdly wrong, how can they possibly be trusted to make decisions regarding significant capital allocation questions and to manage the operations of a complex multinational company?

In our view, these disclosure issues are emblematic of a poorly managed company, led by a board that has made disastrous capital allocation decisions, overseen the destruction of billions of dollars of shareholder value and has ultimately failed shareholders.  We believe that despite the Company's dismal track record, their self-regard remains impenetrable and almost delusional.  They continue to claim a record of "success" and they continue to believe shareholders should reelect the very people that have presided over a number of disastrous years.  It makes us shiver when we consider what may come next.

Before they lose another $11 billion of shareholder value and before it's too late, we must hold those who run this company accountable.  Next month you will have that opportunity.

WE URGE SHAREHOLDERS TO VOTE AT THE 2013 TRANSOCEAN ANNUAL GENERAL MEETING FOR THE ICAHN PROPOSAL TO INCREASE THE DIVIDEND AT TRANSOCEAN TO $4.00 PER SHARE AND FOR THE ICAHN PROPOSAL TO ELECT JOSE MARIA ALAPONT, JOHN J. LIPINSKI AND SAMUEL MERKSAMER TO THE TRANSOCEAN BOARD OF DIRECTORS. 

Very truly yours,
Carl C. Icahn

NOTICE TO INVESTORS

SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT, DATED APRIL 17, 2013, AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY Carl C. Icahn AND HIS AFFILIATES FROM THE STOCKHOLDERS OF TRANSOCEAN LTD. FOR USE AT ITS 2013 ANNUAL GENERAL MEETING WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY SOLICITATION. A DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY ARE BEING MAILED TO STOCKHOLDERS OF TRANSOCEAN LTD. AND ARE ALSO AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV.  INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY SOLICITATION IS CONTAINED IN THE DEFINITIVE PROXY STATEMENT, DATED APRIL 17, 2013.  EXCEPT AS OTHERWISE DISCLOSED IN THE DEFINITIVE PROXY STATEMENT, THE PARTICIPANTS HAVE NO INTEREST IN TRANSOCEAN LTD. OTHER THAN THROUGH THE BENEFICIAL OWNERSHIP OF SHARES, PAR VALUE CHF 15.00, PER SHARE, OF TRANSOCEAN LTD., AS DISCLOSED IN THE DEFINITIVE PROXY STATEMENT.

SOURCE Carl C. Icahn

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