Home Featured Story Carl Icahn–“Shareholder Activist”
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Carl Icahn–“Shareholder Activist”

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Carl Icahn is an investor and businessman that has amassed a great fortune from buying and selling major companies. There are those who call Icahn a "corporate raider" or "imperial shareholder" that is only out to break up companies for short term profits. But he refers to himself as a "shareholder activist" that is keeping managers accountable. Icahn is known to buy large stakes in major companies and attempt to bring about change in management, forcing them to improve their performance. This often means that he is either bought out or the company is broken up and sold at a large profit.

"We're not about liquidating companies, but if you do that, why is that terrible?” he has asked. “We're not blowing up the factories. The person who buys it should be able to make the asset more productive."

Icahn was raised in Far Rockaway, Queens, New York City.  He was educated at Princeton University (A.B., philosophy, 1957). He went then went to New York University School of Medicine, but left without graduating.

Icahn began his career on Wall Street in 1961. In 1968, he formed Icahn & Co., a securities firm that focused on risk arbitrage and options trading. In 1978, he began taking positions in individual companies.

In 2011 Carl Icahn’s net worth is $12.5 billion, making him the 23rd richest American and the 61st richest man in the world.

He has taken substantial or controlling positions in various corporations including RJR Nabisco, TWA, Texaco, Phillips Petroleum, Western Union, Gulf & Western, Viacom, Uniroyal, Dan River, Marshall Field, E-II (Culligan and Samsonite), American Can, USX, Marvel Comics, Revlon, Imclone, Federal-Mogul, Fairmont Hotels, Blockbuster, Kerr-McGee, Time Warner and Motorola. As of 2007, Icahn and his affiliates owned majority positions in firms including ACF Industries, American Railcar Industries, XO Communications, Philip Services, and NYSE-listed Icahn Enterprises, formerly known as American Real Estate Partners.

Some of the details of his ownership in corporations, include:

Mylan Laboratories

In 2004, Icahn purchased a large block of stock of Mylan Laboratories, after Mylan had announced a deal to acquire King Pharmaceuticals. Icahn threatened a proxy fight over the acquisition, on the ground that the deal required Mylan to overpay. He contended that Mylan's chief executive Robert J. Coury was significantly overcompensated and that Mylan's corporate governance was otherwise badly flawed. In early 2005, Mylan gave up its efforts to acquire King, but according to the management, the decision was made after it monitored relevant facts, not due to pressure from Icahn.

KT&G

In 2006, Icahn sold his stake in KT&G (Korea Tobacco & Ginseng) for a substantial profit.

Time Warner

Also in 2006, Icahn attempted to become a major shareholder of Time Warner, owning about 3.3% of the company valued at billions of dollars. He actively sought to influence the direction of Time Warner, often in conflict with its former chief executive, Richard Parsons. Although Time Warner sold 5% of its AOL division, Icahn has pressed for additional action to increase shareholder value.

On February 7, 2006, a group led by Icahn and Lazard Frères CEO Bruce Wasserstein unveiled a 343-page proposal calling for the breakup of Time Warner into four companies and stock buybacks totaling approximately $20 billion. On February 17, 2006, the Icahn-led group agreed with Time Warner to not contest the re-election of Time Warner's slate of board members at the 2006 shareholders meeting. In exchange for the Icahn group's cooperation, Time Warner agreed to buy back up $20 billion of stock, nominate more independent members to the board of directors, cut $1 billion of costs by 2007, and continue discussions with the Icahn group over their proposal, particularly on the future of Time Warner Cable.

Casinos

Icahn sold his casino interests in Nevada in 2008. They included the Stratosphere, Arizona Charlie's Boulder, Arizona Charlie's Decatur, and Aquarius Casino Resort. The sale price of $1.3 billion was roughly $1 billion more than he paid for the properties.

Marvel Comics

Icahn tried to take over Marvel Comics, coming into conflict with Avi Arad, Ron Perelman, and Ike Perlmutter. Marvel ended up being acquired by The Walt Disney Company in late 2009.

Biogen Idec

Icahn's hedge funds currently own 5.6% of biotechnology company Biogen Idec. Beginning in 2007, Icahn has steadily increased his stake in Biogen, seeking to possibly acquire, break up, and/or sell off various parts of the company. As of June, 2009, Icahn has managed to seat two of his allies on Biogen's board with the apparent goal of splitting the company into two entities and possibly replacing CEO James C. Mullen, of whom he has been highly critical.

Motorola

On January 30, 2007 Motorola (NYSE: MOT) said it received notice that Icahn owns about 33.5 million shares, representing a 1.39% interest in the company and pressed for a seat on its board. On May 7, 2007, Icahn's quest for a board seat on Motorola was effectively ended, as the company announced the next day that in a preliminary count of the votes for board members Icahn did not have enough to be elected. Icahn stated that he would not sell his shares in the company.

Lear Corporation

On February 9, 2007, Lear Corporation's (NYSE: LEA) board of directors agreed to a $2.3 billion takeover offer from Icahn, pending a 45 day solicitation period for other offers, which it did not receive, and shareholder approval.

Medimmune

During April, 2007, Icahn successfully pressured Medimmune (MEDI) to consider takeover bids. The company was bought out by AstraZeneca.

BEA Systems

On September 14, 2007, Icahn disclosed his ownership of 8.5% of outstanding shares in business software company BEA Systems. BEA Systems shares rose more than 4% after Icahn disclosed his stake in a filing with the Securities and Exchange Commission. In the filing, Icahn, known for forcefully pushing an agenda at companies where he acquires ownership, suggested that BEA Systems should put itself up for sale. By September 21, Icahn increased his stake to 9.88% of BEA, and on October 3, to 11.05%, and then to 13.22% on October 4, 2007.[12] On January 16, 2008, Oracle Corporation announced it was purchasing BEA Systems.

Yahoo!

On May 13, 2008 Carl Icahn purchased as many as 50 million shares of Yahoo, leaning toward launching a proxy contest. On May 15, 2008 Icahn confirmed that he would be commencing a proxy fight to remove Yahoo's Board of Directors in response to their "irrational" actions in rejecting Microsoft's takeover bid. On July 21, 2008 Icahn agreed to join Yahoo's Board of Directors in a deal that would end the proxy fight. According to the agreement, the Yahoo Board will expand by two directors to eleven members. Eight directors will stand for re-election while the remaining three seats will include Icahn and two nominees that Icahn will recommend. On Oct. 23rd, 2009, Icahn announced his resignation from the board of directors at Yahoo! On Feb 16, 2010, it was revealed that Icahn had reduced his equity stake in Yahoo! from a one-time high of 75 million shares to 12 million shares.

Imclone

In September/October 2008 Icahn became involved in the attempted purchase of Imclone by Bristol Myers Squibb (which was turned down) and eventual sale of Imclone to Eli Lilly in an all cash deal valued at $6.5bn. Icahn had described Bristol Myers Squibb's upwardly revised offer of $62 per share as "absurd."

Editor Phil Robertson is an award-wining journalist and graphic designer. With a degree from the University of Florida’s School of Journalism, his career in journalism and publishing spans over 30 years, and includes positions as editor and publisher for several newspapers and magazines. During his career he has received a first-place award for investigative journalism from the Society of Newspaper Editors, and five ADDY awards for advertising design.

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