Carl Icahn

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Carl Icahn
Born February 16, 1936 (1936-02-16) (age 72)
Queens, New York, U.S.
Occupation Businessman:
Financier
Racehorse owner

Carl Celian Icahn (born February 16, 1936) is an American billionaire financier, corporate raider, and private equity investor. His net worth is US$14 billion as of 2008, making him the 46th richest man in the world.

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[edit] Biography

Icahn was raised in Far Rockaway, Queens, New York City. He was educated at Princeton University (A.B., Philosophy, 1957) and New York University School of Medicine, where he dropped out before graduation.

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 control positions in individual companies. 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, Kerr-McGee, Time Warner and Motorola.

Icahn made extensive use of financier Michael Milken's junk bonds. After the junk bond and overall market bust in the early 1990s, Icahn played a lower-profile role in the business world, preferring to be less public in his dealings.

Icahn developed a reputation as a ruthless corporate raider after his hostile takeover of TWA in 1985.[1] The result of that takeover was Icahn systematically stripping TWA of its assets and selling them off.[2]

[edit] Business interests

As of 2007, Icahn and his affiliates currently own 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.

Icahn is a director of Blockbuster Inc., and the Chairman of Imclone, Icahn Enterprises LP, XO Communications Inc, WestPoint Home Inc., Cadus, and American Railcar Industries. Also he is a beneficial owner of Adventrx Pharmaceuticals Inc, Vector Group Ltd and has had significant holdings in Time Warner Inc. He has casino interests in Las Vegas, Nevada (pending sale), including the Stratosphere, Arizona Charlie's Boulder and Arizona Charlie's Decatur, which are operated through American Entertainment Properties, a subsidiary of Icahn's major company American Real Estate Partners. Icahn has also tried to take over Marvel Comics, coming into conflict with Avi Arad, Ron Perelman, and Ike Perlmutter.[3]

In 2004, Icahn purchased a large block of stock in a pharmaceutical concern, Mylan Laboratories, after Mylan had announced a deal to acquire another company in that market, King Pharmaceuticals, of Bristol, Tennessee. Icahn threatened a proxy fight over the acquisition, saying that the contract required Mylan to over-pay. He also 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 management said this was a result of its ongoing monitoring of relevant facts, not due to pressure from Mr. Icahn.

In 2006 Icahn sold his stake in KT&G (Korea Tobacco & Ginseng) for a significant quick one year profit.

Icahn made an attempted run as a major shareholder of Time Warner owning about 3.3% of the company valued at billions of dollars. He has been actively attempting to influence the direction of Time Warner, often in conflict with its former Chief Executive, Richard Parsons. Although Time Warner recently sold 5% of its AOL division, Icahn has been pressing 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 TW's slate of board members at the 2006 shareholders meeting. In exchange for the Icahn group's cooperation, Time Warner will 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.

[edit] Recent developments

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In August 2006, he bought stock in the video game publisher Take-Two Interactive.

In January 2007, he purchased a 9.2% stake in Telik, Inc. (Nasdaq: TELK), a biotech company engaged in cancer research, because he believed its shares were undervalued.

On January 16, 2007 it was disclosed in a Securities and Exchange Commission filing that Mr. Icahn is the beneficial owner of 14.57%, or 6.1 million shares, of WCI Communities Inc. (NYSE: WCI) [1]. In the filing Mr. Icahn indicated that he intends to contact WCI to discuss how to "unlock the inherent value" of its shares.

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. But he was promptly turned down by the majority of the stock holders in the election for Board Directors which was held on May 8th.

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.[4] [5]

On February 27, 2007, Icahn invested $50 million in Motricity, a North Carolina-based provider of mobile content delivery technology. On April 23, 2007, Carl Icahn's company announced it was selling the Stratosphere and three other southern Nevada casinos to an affiliate of Goldman Sachs for $1.3 billion.

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

On May 7, 2007, Icahn's quest for a board seat on Motorola is 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.

On September 14, 2007, Icahn disclosed his ownership of 8.5% of outstanding shares in business software company BEA Systems Inc. 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.[6] On January 16, 2008, Oracle Corporation announced it was purchasing BEA Systems.[7]

On March 9, 2008, a story about Carl Icahn aired on American news program, 60 minutes, with reporter Leslie Stahl.

On March 21, 2008 Icahn appeared on Nightly Business Report and discussed his views on proxy fights.

On March 24, 2008 Icahn sued Motorola as part of his efforts to gain 4 seats on Motorola's Board and force a sale of its mobile business.

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 May 22, 2008 Carl Icahn, a long time donor to both Republicans and Democrats, spoke out against 2008 Democratic presidential nominee Barack Obama saying that Obama would be a "terrible president who would wreck the economy." [8]

[edit] Philanthropy

Icahn Stadium on Randall's Island in New York City is named after him, as is the Carl C. Icahn Center for Science and Icahn Scholar Program at Choate Rosemary Hall, a top-tier New England prep school. This organization pays for tuition, room and board, books, and supplies for 10 students every year for four years (freshman-senior), an expense that adds up to about $160,000 dollars per student.

Icahn made a substantial donation to his alma mater, Princeton University, to fund a genomics laboratory which bears his name, the Carl C. Icahn Center for Science, Choate Science Building designed by I.M. Pei; and the Carl C. Icahn Laboratory for Princeton University's Institute for Integrated Genomics. He also made a large donations to Mount Sinai Hospital, New York, of which he is a trustee, which in return named a building the Icahn Medical Institute designed by Davis Brody Bond.

His foundation, the Children's Rescue Fund, built Icahn House in The Bronx, a 65-unit complex for homeless families consisting of single pregnant women and single women with children, and operates Icahn House East and Icahn House West, both of which are homeless shelters located in New York City.

Icahn has received numerous awards, including the Starlight Foundation's Founders Award and its 1990 Man of the Year Award. He was also named Guardian Angel 2001 Man of the Year. In 2004, he was honored by the Center for Educational Innovation - Public Education Association for his work with charter schools. In 2006, he was honored with the 100 Women in Hedge Funds Effecting Change Award for his outstanding contributions to improving education.

[edit] Thoroughbred horse racing

In 1985 Carl Icahn established Foxfield Thoroughbreds, a horse breeding operation. At that year's Newstead Farm Trust sale run by Fasig-Tipton, he paid $4 million for Larida, a 6-year-old mare and a record $7 million for the 4-year-old bay mare Miss Oceana who was in foal to champion sire, Northern Dancer.

Icahn's Meadow Star won the 1990 Breeders' Cup Juvenile Fillies and was voted the Eclipse Award for Outstanding Two-Year-Old Filly. In 1992, Foxfield ended its racing operation and became a commercial breeder. Having bred more than 140 stakes horses, in 2004 Icahn shut down Foxfield, selling all his mares and weanlings without reserve at the Keeneland November breeding stock sale.

[edit] External links

[edit] See also

[edit] References

  1. ^ 10 Questions for Carl Icahn by Barbara Kiviat, Time Magazine, Feb. 15, 2007
  2. ^ TWA - Death Of A Legend by Elaine X. Grant, St Louis Magazine, Oct 2005
  3. ^ Comic Wars by Dan Raviv, Broadway Books, April 2002
  4. ^ Lear agrees to Icahn buyout, may seek other offers, by David Bailey, Reuters, February 9, 2007
  5. ^ Lear Announces Expiration of Solicitation Period for Alternative Acquisition Proposal, Lear Corporation Press Release, March 27, 2007
  6. ^ Icahn further raises BEA stake to 13.22 percent, Reuters, October 3, 2007
  7. ^ Oracle To Buy BEA Systems For About $8.5 Bln.
  8. ^ Icahn Says Obama Would Be `Terrible' U.S. President (Update1), Bloomberg, May 22, 2008.

[edit] Additional reference

  • Connie Buck, The Predator's Ball (1988); Chapter 8 ("Icahn-TWA: From Greenmailer to Manager-Owner")