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Occidental Adopts 'poison Pill'

Occidental Petroleum Corp. (OXY) said it adopted a limited duration stockholder rights plan and declared a dividend of one "Right" for each outstanding share of Occidental common stock.

A stockholder rights plan, colloquially known as a "poison pill", is a type of defensive tactic used by a corporation's board of directors against a takeover. The plan can be issued by the board of directors as an "option" or a "warrant" attached to existing shares, and only be revoked at the discretion of the board.

Occidental noted that its board will submit the Rights Agreement to a vote at the company's 2020 annual meeting, and the Rights will expire following the meeting if Occidental stockholders do not adopt a proposal to approve the Rights Agreement. If Occidental stockholders approve the proposal, the Rights Agreement will, by its terms, expire in one year.

Earlier this week, the Wall Street Journal reported that activist investor Carl Icahn increased his stake in Occidental Petroleum to almost 10%, and doubled down on a fight to take control of the oil producer.

Icahn held a about 2.5% stake as of the end of last year.

On Tuesday, Occidental said it would reduce quarterly dividend and 2020 capital spending, due to the sharp decline in global commodity prices.

Occidental board approved a reduction in the company's quarterly dividend to $0.11 per share from $0.79 per share, effective July 2020. The company would reduce 2020 capital spending to between $3.5 billion and $3.7 billion from $5.2 billion to $5.4 billion and wouuld implement additional operating and corporate cost reductions.

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