Talisman Energy Inc. (TLM)

[Timothy Smith]

Carl Icahn announced that he has, through his various holding companies, increased his position in Talisman energy to 61mm common shares, representing 5.97% of the company’s total outstanding shares. Mr. Icahn also announced his intention to have conversations with management about asset sales or restructuring.

I note that Talisman’s management has already been actively pursuing asset sales in an effort to unlock shareholder value. I believe that Mr. Icahn’s position in the stock may accelerate these efforts further. However, the current asset market is fairly soft, with a large number of land packages available in Western Canada.

I currently carry US$15 for Talisman’s RENAV on strip pricing, which suggests that there is relatively little upside from corporate activism in the current price environment. Additionally, Talisman has some tax issues that could prevent that full value from being realized in a corporate break-up scenario.