Marathon Oil investor sues to block $17 billion ConocoPhillips deal amid U.S. oil and gas M&A spree

(Bloomberg) – A Marathon Oil Corp. shareholder sued to block its proposed acquisition by ConocoPhillips, claiming the $17 billion deal “significant undervalues” the target company.

In a lawsuit filed Monday in New York state court, Martin Siegel says the Conoco deal could deprive Marathon investors of more than $6 billion in value. He further alleges Marathon, its directors and financial adviser Morgan Stanley, misrepresented the deal in a proxy statement recommending shareholders back it.

Siegel is asking a judge to put an investor vote on hold until a trial is held or the parties issue corrective disclosures.

Neither Marathon nor Conoco immediately responded to a request for comment.

The all-stock deal, part of an M&A spree among key U.S. oil and gas industry players, would give Conoco control of assets in Texas, North Dakota and the Perbasin.

In his suit, Siegel claims Marathon’s management and advisers are conflicted due to their financial interest in closing the deal. He says Marathon Chief Executive Officer Lee Tillman stands to cash in stock grants valued at over $70 million while Morgan Stanley will earn $42 million in fees if the deal closes.