Billionaire investor Carl Icahn revealed he had bought a 7.6 percent stake in Chesapeake Energy Corp (CHK.N) and called for the natural gas producer to replace at least four directors, saying the board has failed "in a dramatic fashion" in its oversight of management.

The corporate-raider-turned-activist investor asked the company for two board seats for his own representatives and two for another large shareholder such as Chesapeake's largest, Southeastern Asset Management.

The news was the latest in a saga that has seen the company come under intense pressure from investors to improve its corporate governance after Reuters reported in April that Chesapeake Chief Executive Aubrey McClendon had taken out more than $1 billion in loans using his personal stakes in thousands of company wells as collateral.

Icahn's move had been widely rumored, and McClendon told analysts earlier this month he would not be surprised if Icahn bought in, since he had made hundreds of millions of dollars in the stock last year.

But Icahn blasted the company in a letter to Chesapeake's board of directors, saying its earlier promises to act in a more financially responsible way had proven hollow.

"This board has led the company through a highly publicized spate of corporate governance breakdowns while amassing an astounding $16 billion funding gap, which we believe has contributed to the share price decline of over 55 percent from the 52-week high," Icahn wrote in a letter to the company.

Icahn holds 50.1 million shares in the company, according to a regulatory filing. That would make him the third-largest shareholder in the company, according to Thomson Reuters data.

Stifel Nicolaus analyst Neal Dingmann said the move by Icahn would be a distraction as the company raced to complete two key asset sales in the coming months amid the weakest natural gas prices in a decade.

"It does add another layer or another level of complication when the primary focus should be getting the asset sales done," he said.

Chesapeake said in a statement that its board's immediate priority is finding an independent chairman for the company. The company said that once that task is finished, the board will review Icahn's request for representation.

DINNER WITH AUBREY

Icahn said in the letter he had recently had dinner with McClendon to discuss the company's funding gap and suggest new shareholder representation on the board, but was told that no changes to its makeup would be considered before a new chairman was brought in.

In calling for four board members to be replaced, Icahn singled out only Louis Simpson, the former Geico executive, as one who should remain on the board.

Icahn had bought a 5.8 percent stake in Chesapeake in December 2010, prompting the Oklahoma City company to sell more than $4.5 billion in assets, a move that drove its stock higher in early 2011.

But since then, the company accelerated its aggressive land purchases and spent money to operate non-core assets, Icahn said.

Earlier this month, Southeastern Asset Management, Chesapeake's largest shareholder, urged the company to sell more assets or consider a sale of the entire company.

Chesapeake, which earlier this month arranged a pricey $4 billion loan from its investment bankers to tide it over, has said it will sell as much as $11.5 billion in assets this year as it scrambles to raise cash to close its cash shortfall.

Chesapeake shares, which had dropped 29 percent so far this year through Friday's close, gained 1.5 percent in post-market trading.

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