8 Snapshots Of Carl Icahn Takeovers5:42 PM EST Tue. Jul. 23, 2013
Love him or hate him, investor Carl Icahn may be in control of Dell by Thursday if Dell CEO Michael Dell is unsuccessful with his $24.4 billion leveraged buyout plan.
Icahn has been both vilified and praised for his ruthless business savvy in industry circles. He is famous for taking large stakes in companies, ousting the CEO and shaking up the board of directors.
Now his sights are set on Dell. Wednesday shareholders will vote to either back Michael Dell's vision of slow-growth transformation into a business software and services firm or Icahn's plan. For the record, Icahn won't say what he will do with Dell if given the opportunity except oust CEO Michael Dell and replace the company's board.
Icahn's track record of taking on tech companies is a mixed bag. Here is a look at seven of his past high-profile corporate takeovers.
Seven years ago Carl Icahn had an itch: break up media goliath Time Warner into separate businesses -- AOL, a publishing company, a cable services company and a film company. But by 2008, Icahn had sold his stake in Time Warner and admitted defeat.
Icahn had set his sights on ejecting Time Warner's then-CEO Richard Parsons (pictured) and replacing him with former Viacom CEO Frank Biondi. It was 2006 and Time Warner had just sold off 5 percent of its AOL division. Icahn wanted it to sell more. Owning about 3.3 percent of the company, Icahn was pushing the Time Warner board to increase shareholder value by more aggressively selling parts of its business and replace Parsons. Icahn proposed stock buybacks totaling approximately $20 billion. Icahn met strong resistance to his breakup plan. In an attempt to get Icahn to back off, Parsons agreed that Time Warner would buy back its stock to boost the share price. Icahn backed off and sold his stake in Time Warner. Icahn lost that battle, but Time Warner eventually did split up the company, spinning off Time Warner Cable and AOL in 2009. In March, Time Warner spun off its publishing arm Time Inc.
In February 2008 Microsoft was making a buyout play for Yahoo. The only problem was Yahoo's board and then-CEO Jerry Yang weren't interested. That May, Icahn purchased 50 million shares of Yahoo and began threatening a proxy fight to oust Yahoo's board in response to what he called its "irrational" refusal to sell to Microsoft.
Icahn agreed to abandon a proxy fight that aimed to force the company's sale to Microsoft in exchange for a seat on Yahoo's board of directors. He also called for Yahoo to expand its board to include a seat for himself and two nominees he recommended.
In October 2009 Icahn resigned from the board, never accomplishing his ultimate goal of selling Yahoo to Microsoft. In an outgoing note to the Yahoo board of directors, he counted a strategic 10-year partnership with Microsoft and the replacement of CEO Jerry Yang with Carol Bartz as major accomplishments. In 2010 Icahn dumped most of his Yahoo shares.
In January 2007 Icahn gobbled up 33.5 million shares of Motorola, or a 1.4 percent interest in the company. At the time Motorola hadn't been split into two separate entities (Motorola Mobility and Motorola Solutions) as it is today. Icahn pressed for a seat on Motorola's board of directors but was turned down by the majority of stockholders.
Undeterred, in March 2008, Icahn sued Motorola for the right to gain four seats on the company's board. Once he was able to accomplish that, he forced the company to sell its mobile business. In August 2011, Google bought Motorola Mobility for $12.5 billion (or $40 a share). The deal netted Icahn a handsome profit. The day before the sale of Motorola Mobility, Icahn's 26.8 million shares were worth $655.8 million. The day after the sale, his shares were worth $1 billion.
In September 2007, Icahn disclosed he owned 8.5 percent of business software company BEA Systems. At the time he let it be known he thought the company should put itself up for sale. Icahn then aggressively upped his ownership in BEA to 9.88 percent by the end of the month and then upped his ownership again to 13.22 percent by the end of October.
By the end of 2007, Oracle had expressed interest in buying BEA Systems. Icahn went head-to-head with the BEA board, insisting it accept a $17-per-share offer from Oracle, instead of a $21-per-share deal the board was demanding. When the board declined to sell, Icahn accused the board of finding ways to derail the sale and demanded a shareholder vote.
Icahn filed suit in Delaware Chancery Court to force a proxy battle for BEA's board of directors in hopes of forcing the sale to Oracle. In the end, Icahn is credited for hammering out a deal with Oracle to pay $19.37 a share (or $8.5 billion) -- a compromise between the $17 and $21 share prices.
Icahn was a director of Blockbuster for five years until January 2010. At Blockbuster he vigorously fought the then-CEO John Antioco for control of the company's direction and was highly critical of Antioco's salary.
At the beginning of 2010, Icahn owned more than 19.9 million shares of Blockbuster. By the end of March that same year Icahn had sold off his 78 percent of stake in the company, leaving him with 4.36 million shares. Later that year Blockbuster filed for bankruptcy protection. Icahn famously called Blockbuster "the worst investment I ever made."
On Oct. 31, 2012, Icahn bought 5.5 million shares of the Internet video service provider Netflix, taking a 10 percent stake in the company. Icahn didn't waste any time and said he thought a cash-strapped Netflix would be worth more as part of a bigger cash-rich company such as Amazon, Microsoft or Verizon Communications.
Icahn is currently pursuing shareholders support for the sale of Netflix. In response, Netflix has adopted a poison pill strategy to deter Icahn from acquiring the company. On Monday, Netflix reported it had doubled its earnings this year.
Airliner Trans World Airlines was obviously not a tech company, but it was a takeover target closely associated with Icahn's corporate raider reputation. Here is a look at what happened on Icahn's watch while controlling TWA.
In 1985, Icahn bought 20 percent of the airline's stock and took over as the company's chairman. Once in control he began stripping the company of assets to repay the debt he used to purchase the company. In 1988, Icahn took TWA private, pocketing $469 million from the deal and leaving the company with $540 million in debt. In 1991, TWA sold its most lucrative airline routes to American Airlines for $445 million. The next year TWA filed for Chapter 11 bankruptcy protection.
In January 1993 Icahn resigned as chairman.