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Carl Icahn: Google Did Not Overpay for Motorola Mobility

He’s followed for his ability to unlock shareholder value. And on Monday Carl Icahn unlocked shareholder value to the tune of $12.5 billion or $40/share.

That’s what Google paid to acquire Motorola Mobility. The price represents a 63% premium to Friday’s close and a victory for billionaire investor Carl Icahn, among Motorola Mobility’s top shareholders.

The deal announced on Monday will net Mr. Icahn a sizable return. His 26.8 million shares are now worth over $1 billion, up from $655.8 million on Friday.

Icahn has long urged Motorola Mobility’s board to explore alternatives. The latest came in July when he suggested shopping the company’s patents.

“This is a great outcome for ALL shareholders of Motorola Mobility, especially in light of today’s markets,” Mr. Icahn said in a press release. “Motorola is activism at its best and we applaud management and the board for acting so responsibly.”

However, the Street was not without criticism of the deal. Among the many issues circulating on the floor was whether Google had overpaid for Motorola – Google paid a 63% premium to Friday’s close. “The Street thinks the premium was too high and is now wondering if Google bit off more than it can chew,” says Fast trader Pete Najarian.

But in a live interview on CNBC’s Fast Money Icahn challenges critics.

”It was undervalued mathematically," he says. "It has 3.5 billion in cash and a set top box company worth $2.5 billion. That’s $6 billion right there. The company has put billions into operations. When you add all that up I think Google is getting the patents at a good price.”

And Icahn doesn't hesitate to remind the traders that they often razzed him for his long position in the company. “I used to take a bit of guff for my position,” he says with a smile. "But who got the last laugh?!"

And in case you’re wondering where Icahn might unleash more shareholder value, he also tells us, "I think Motorola Solutions is still very attractively priced."




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Trader disclosure: On Aug 15, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders Terranova owns (XOM); Terranova owns (CVI); Terranova owns (CAT); Terranova owns (OXY); Terranova owns (AAPL); Terranova owns (DAR); Terranova owns (FCX); Terranova owns (CACI); Terranova owns (ARUN); Terranova owns (ORCL); Terranova owns (EMC); Terranova owns (NCR); Terranova owns (VMW); Terranova owns (IBM); Terranova owns (AMZN); Terranova owns (LULU); Terranova owns (LTD); Terranova owns (WFM); Terranova owns (WFC); Terranova owns (JPM); Terranova owns (AXP); Terranova owns (FXA); Terranova owns (VRTS); Terranova owns (LQD); Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Najarian owns (AAPL); Najarian owns (C); Najarian owns (BX); Najarian owns (MS); Najarian owns (MSFT); Najarian owns (PFE); Najarian owns (TCK) ; Najarian owns (ECA); Najarian owns (MS); Najarian owns (DIS); Najarian owns (IDCC) calls; Najarian owns (GLD) calls; Najarian owns (GDX) calls; Najarian owns (SLV) calls; Najarian owns (SGI) calls; Najarian owns (CMC) calls; Najarian owns (RSX) calls; Najarian owns (DIS) calls; Najarian owns (UNP) calls; Seymour owns (AAPL); Seymour owns (BAC)

For Joe Terranova
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
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For Todd Gordon
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For Mark Wiltamuth
Within the last 12 months, Morgan Stanley managed or co-managed a public offering (or 144A offering) of securities of CVS/Caremark Corp., Family Dollar Stores Inc, Fresh Market Inc, GNC Holdings Inc, Wal-Mart Stores, Inc.
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