Transocean And Carl Icahn Strike An Accord; Analysts See Limited Upside

Transocean (NYSE: RIG) reached an agreement on Monday with famed corporate raider Carl Icahn. Shares of Transocean have been trading up over three percent following the pre-market news release.

Transocean is set to pay a $3 dividend, which will benefit Icahn, who is the company's third largest shareholder. The proposed dividend will be voted on next year, and if approved will total $1.08 billion.

The stock can reach $60 assuming shares trade at five percent yield on the proposed $3 dividend, according to a Bernstein analyst. The firm's Scott Gruber said in a research note he is anticipating limited upside past $60 amid catalysts which have been mostly "exhausted."

Icahn has taken an activist role in the Switzerland-based company since January, saying it had been involved in “ill-advised mergers, employed unsuccessful development strategies and squandered the substantial cash flow.”