FILE PHOTO: Anadarko Petroleum Corporation is seen in The Woodlands, Texas, U.S., April 30, 2019. REUTERS/Loren Elliott

HOUSTON (Reuters) – Anadarko Petroleum Corp (APC.N) on Monday released new financial details of its proposed combination with Occidental Petroleum (OXY.N) that revealed its acquirer did not expect to generate enough cash to cover its shareholder payments until 2022.

Activist investor Carl Icahn this month launched a campaign to unseat four Occidental directors, arguing its board entered into the $38 billion deal to preclude Occidental from becoming a takeover target. He has attacked the deal as too pricy and for the lack of an Occidental shareholder vote.

Anadarko said in a regulatory filing it amended its merger proxy in response to a lawsuit alleging it had failed to provide its shareholders with full details of the cash-and-stock sale. Its shareholders are due to vote on the sale Aug. 8.

An Anadarko spokesman did not immediately reply to requests for comment.

The revisions include projections that the filing said was provided by Occidental’s management and adjusted by Anadarko’s executives showing the standalone company’s free cash flow would fall below dividend payments in each of the next three years. The shortfall increased each year through 2021, according to the proxy revision.

Companies that do not generate enough free cash flow to cover expenses such as dividends typically have to borrow or sell assets to cover the shortfall.

The new details also include an $8.4 billion estimate of the value of Anadarko’s share in Western Gas Partners LP (WES.N), a publicly-traded natural gas processing, storage and pipeline company. That stake is expected to be offered for sale after the combination takes place.

Reporting by Gary McWilliams; editing by Diane Craft and Chris Reese

Our Standards:The Thomson Reuters Trust Principles.

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