* Icahn still wants $4 per share dividend
* Company plans $2.24 per share payout
* Shares up slightly
March 4 (Reuters) - Activist investor Carl Icahn affirmedplans to propose a $4.00 per share dividend at Transocean Ltd's annual meeting, a day after the world'slargest drilling contractor said it will restart payouts at alower rate.
Icahn, who has been campaigning for a higher payout for overa month, said he would propose the dividend he had suggested inJanuary, at Transocean's annual meeting on May 17, according toa filing with the U.S. Securities and Exchange Commission onMonday.
Transocean's latest plan "further highlights a long trackrecord of weak capital allocation strategy," Icahn said in thefiling.
The board has recommended that shareholders approve a $2.24per share dividend. The total payout would be about $800million, the company said on Sunday.
After paying a dividend in 2011, its first in nine years,Transocean last year abandoned payouts that totaled $3.16 pershare annually, to maintain a strong balance sheet andinvestment-grade rating on its debt.
On Monday, Chief Financial Officer Esa Ikaheimonen said itwould be a stretch for Transocean to launch an initial publicoffering of a master limited partnership of some of its rigs in2013 because the process would take about a year to complete.
But he added that Transocean had attractive assets for sucha transaction, particularly among its Gulf of Mexicoultra-deepwater fleet.
"The market size is limited so I think up to threeultra-deepwater rigs could potentially be an IPO, and nothingmuch more than that," Ikaheimonen said in his first quarterlyconference call since he was hired from Seadrill lastyear.
"You will have to wait and see and we will keep you up todate as to when we make progress."
Ikaheimonen had been involved in spinning out an initialgroup of four rigs from Seadrill into a partnership.
Icahn said he would nominate three directors to Transocean'sboard who will have experience creating "yield vehicles" and canhelp the drilling contractor execute an MLP strategy.
The company has struggled with ballooning costs over thepast few years as it sought to get its aging fleet into shapeunder stricter regulations that followed BP's 2010Macondo oil spill, which destroyed a Transocean rig and killed11 people.
Transocean reached a $1.4 billion settlement with the U.S.government on Jan. 3 over its liability in the Macondo disaster.Ten days later, Icahn declared his initial stake of about 1.56percent.
Because of the reduced uncertainty with the Macondosettlement, Ikaheimonen said the company would now seek tomaintain total financial liquidity of $3.5 billion to $4.5billion, down from a previous range of $5 billion to $6 billion.
Switzerland-based Transocean, which has long-term debt ofmore than $11 billion, plans to accelerate repayment with anobjective of retiring $1 billion of debt by the end of 2014.
Transocean on Friday reported revenue growth and ahigher-than-expected profit for the quarter that ended Dec. 31,as more of its fleet was working compared with a year ago.
Transocean said its revenue efficiency, or how much itearned compared with what it could have made, rose to 94.7percent from 91.8 percent in the same quarter in 2011, and itaims to stay at least around 93 percent.
But in the first two months of the first quarter, revenueefficiency had been only around 90 percent due to a previouslyannounced inspection and replacement of bolts on some of itsrigs, Ikaheimonen said.
Transocean shares rose 4 cents to $52.19 on the New YorkStock Exchange late Monday afternoon, while the Philadelphia oilservice index was down about 1 percent.
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