CNBC's Faber: What's Behind Icahn And Motorola...
Senior Editor, CNBC
Carl Icahn wants to be on the board of Motorola . But why? Well, CNBC's David Faber gave his take on the situation during "Morning Call." Whatever the reason, Motorola's stock is going through the roof today on the news (might this be the reason?), up more that 6% at one point.
As Faber reports--Icahn made the move yesterday-submitting a proposal--stating he wanted to be on the board. Icahn just put in his own name. This is a bit different from when Icahn proposed himself for the Time Warner board (see below). He submitted his own name with a slate of others. Faber says he's been told Icahn made a few calls to senior execs at Motorola--but there's no details beyond that at this point. It was Motorola itself--in a press release--that told of Icahn's plan.
Icahn has some 33 million shares of the cell-phone maker--about 1.39% of the company's shares. As for why Icahn is doing this--Faber said that the company--despite a poor 4th quarter--has some $12 billion in net cash, and Icahn might want to make sure Motorola is returning that cash to stockholders. Motorola increased dividends last May. It also has a $4.5 billion buyback plan in place. Last summer--a $4 billion buyback plan was finished that took 14 months to complete.
FYI-Last year, the financier urged Time Warner to sell its cable assets and repurchase $20 billion in shares to "unlock" value for shareholders. CEO Richard Parsons initially rebuffed Icahn, but eventually boosted the company's buyback program.
Icahn is a director of Blockbuster Inc, and the chairman of Imclone,American Real EstatePartners LP, XO Communications Inc, WestPoint Home Inc. and American Railcar. Also he is a beneficial owner of Adventrx Pharmaceuticals Inc, Hollywood Entertainment, National Energy Group Inc, Vector Group Ltd and has significant holdings in Time Warner Inc. He has casino interests in Las Vegas, Nevada, 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.