Icahn Expected to Disclose Stake in Chesapeake

By RYAN DEZEMBER And DANIEL GILBERT May 13, 2012, 7:53 p.m. ET

Chesapeake Energy Corp. is expecting activist investor Carl Icahn to disclose soon that he has taken a significant stake in the embattled natural-gas company, according to people familiar with the matter.

Such a move by Mr. Icahn could ratchet up pressure on Chesapeake, which faces a cash crunch and corporate-governance controversies that have pushed its stock to the lowest level since 2009; he has said previously that investors want the company to reduce its leverage. But he is also known to buy stocks he thinks have become bargains, and shares often rise as other investors mimic him. A spokeswoman for Mr. Icahn declined to comment on Sunday.

Any boost to the stock could cheer investors, whose shares lost $1 billion of value in less than an hour on Friday as Chesapeake revealed that it might have to delay planned asset sales to stay in compliance with the terms of its line of credit. The company's market capitalization sank to $9.8 billion, the first time it has fallen below $10 billion since the financial crisis in 2008.

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