WHEN: TODAY, TUESDAY, OCTOBER 27TH AT 12:45PM ET
WHERE: CNBC'S "FAST MONEY HALFTIME REPORT"
Following is the unofficial transcript of a FIRST ON CNBC interview with Carl Icahn, Chairman Icahn Enterprises, and CNBC's Melissa Lee, today, Tuesday, October 27th on CNBC's "Fast Money Halftime Report" at 12:45PM ET. Icahn sets the record straight on CIT.
All references must be sourced to CNBC.
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LEE: EARLIER TODAY, MR. ICAHN ANNOUNCED AN OFFER FOR CIT'S SMALLER BONDHOLDERS WHO HE SAYS HAVE BEEN AT A DISADVANTAGE BY THE RESTRUCTURING PROCESS. CARL, IT IS ALWAYS GREAT TO SPEAK WITH YOU.
CARL ICAHN: GOOD TALKING TO YOU, MELISSA.
LEE: THE DEADLINE IS LOOMING. THURSDAY, 11:59 P.M IS THE ABSOLUTE DROP DEAD PERIOD IN WHICH THE NOTEHOLDERS CAN ACTUALLY CAST THEIR VOTE. AT THIS POINT, WHAT IS YOUR TEAM DOING TO ENSURE YOUR EFFORT SUCCEEDS AND WHAT AT THIS POINT, IS YOUR INDICATIONS TO WHETHER OR NOT IT WILL SUCCEED?
ICAHN: WE'RE DOING SOMETHING I THINK THAT'S SORT OF A FIRST TIME. IT'S A BIT OF A NEW THING IN BANKRUPTCY AND I HOPE IT'S GOING TO CHANGE THINGS A BIT. WE LOOK AT CIT AS THE POSTER BOY FOR WHAT IS WRONG WITH THE WHOLE BANKRUPTCY SYSTEM. WE DECIDED TO GO TO THE SMALL BONDHOLDERS THAT HAVE BEEN TAKEN ADVANTAGE OF BY CIT AND -- TO START, CIT HAS DONE AN ABYSMAL JOB IN RUNNING THIS COMPANY. THE MANAGEMENT AND BOARD AS YOU KNOW, IN '08, LOST 2.8 BILLION. WHILE THAT HAPPENED, THEY PAID THE TOP SIX MANAGERS SOMETHING LIKE 20 MILLION AND JEFF HAD 5.4 MILLION AND THE USE OF AIRCRAFTS AND PLANES AND WHAT HAVE YOU. BUT FORGETTING ALL THAT, WHAT I DON'T WANT TO SEE AND I THINK I'M THE LARGEST BONDHOLDER WITH 2 BILLION FACE AMOUNT, I DON'T WANT TO SEE THIS COMPANY GO BACK INTO THE HANDS OF THE BANKRUPTCY. IN A PREPACKAGED BANKRUPTCY THE WAY IT'S SET UP, IT WILL GO RIGHT BACK INTO CONTROL OF THE GUYS THAT GOT US THERE IN THE FIRST PLACE. THE WAY IT'S STRUCTURED, I BELIEVE WILL CONTINUE TO LOSE 2 TO $3 BILLION.
LEE: FINANCIALLY, WHAT ARE YOU OFFERING THESE SMALLER SHAREHOLDERS? YOU'RE OFFERING WHAT YOU'RE CALLING A PUT OPTION BASICALLY.
ICAHN: THAT'S RIGHT. THE COMPANIES, CIT HAS SCARED THE HELL OUT OF THE BONDHOLDERS AND ESPECIALLY THE SMALL ONES BY SAYING IF IT GOES INTO A FREE FALL BANKRUPTCY, I CALL IT TRADITIONAL BANKRUPTCY, THAT THE BONDS ARE GOING TO GO WAY DOWN.AS LOW AS $6.
LEE: SIX TO 37 CENTS ON THE DOLLAR.
ICAHN: YOU GOT IT. AND WE SAY THAT'S NONSENCE. BUT SAYING PUT MY MONEY WHERE MY MOUTH IS, WE'RE TELLING THE BONDHOLDERS, VOTE AGAINST THIS PLAN AND WE WILL PUT A TENDER OUT AT 60% AT 60 SO YOU CAN'T GET LESS THAN 60. SO YOU CAN MAKE UP YOUR MIND. YOU HAVE 30 DAYS SO YOU GET A FREE PUT, SO FOR 30 DAYS YOU GET YOUR CAKE AND EAT IT, SO TO SPEAK.
LEE: RIGHT.
ICAHN: IF THE BONDS STAY GOOD, YOU CAN KEEP THEM AS YOU WISH OR TENDER THEM TO ME NO MATTER WHERE THEY GO DOWN.
LEE: LET'S SAY I'M A SMALL NOTE HOLDER OUT THERE. THE BONDS ARE TRADING HIGHER THAN THAT RIGHT NOW, AND SO I'M CURIOUSYOU'RE OFFERING THEM PARTICIPATION TO THE UPSIDE WHICH YOU'RE CAPPING AT ABOUT 85 CENTS ON THE DOLLAR.
ICAHN: I BELIEVE IT WILL GO.
LEE: SO THATS THE UPSIDE. YOU'RE BASICALLY SAYING WE'LL GIVE YOU AN EXTRA 25 CENTS ON THE DOLLAR OR SO.
ICAHN: IN A WAY, BECAUSE YOU KNOW, OBVIOUSLY, THOSE BONDS TODAY AND MAYBE YOU CAN SELL THEM, MAYBE YOU CAN'T.I'M NOT SURE WHAT THEY'RE TRADING. OBVIOUSLY, WE CAN SELL THEM, BUT IF YOU'RE NOT GOING TO SELL THEM, I'D SAY YOU'RE BETTER OFF WITH NOT SEEING THIS PREPACK HAPPEN AND WAITING TO SEE HOW WELL YOUR BONDS WILL DO. BUT IF YOU'RE NERVOUS, SCARED BECAUSE THEY SCARED YOU AND THAT'S WHY YOU MIGHT VOTE FOR THIS OR NOT AT ALL, WE SAY WE'LL PROTECT YOU AT 60 FOR 30 DAYS. SORT OF UNHEARD OF. ITS REALLY A FREE PUT TO THE SMALL INVESTOR. YOU SEE THE SMALL INVESTOR BANKRUPTCY IRONICALLY DOES HAVE A LOT TO SAY. THEY VERY RARELY IF EVER TAKE ADVANTAGE OF THE FACT THAT YOU NEED 50% OF THOSE VOTING TO PASS A PREPACK.
LEE: LET ME ASK YOU THIS BECAUSE A LOT OF INVESTORS OUT THERE, THEY LIKE TO TAKE THEIR CUES FROM THE BIG INVESTORS. A LOT OF BIG NOTE HOLDERS AT THIS POINT ARE NOT ON BOARD WITH YOUR CAMPAIGN WHICH IS WHY YOU'RE GOING AFTER THE SMALL NOTE HOLDERS. WHAT DO THEY KNOW THAT THE SMALL NOTE HOLDERS DON'T?
ICAHN: LET ME SPEAK TO THIS WHICH I THINK IS REPREHENSIBLE. I'M NOT LOOKING TO PAT MYSELF ON THE BACK BUT IM NOT TAKING ADVANTAGE OF IT. THE COMPANY HAS GONE OUT TO SOME OF THE BIG NOTE HOLDERS, ESPECIALLY ON SOME OF THESE THATARE PURPORTED TO REPRESENT US, AND GIVING THEM LITERALLY A $200 MILLION GIFT BY LETTING THEM FUND THE DIP IN THE BANKRUPTCY, SO THEY'RE GOING TO THEM AND SAYING, WE'LL LET YOU FUND IT. WE'RE GOING TO PAY YOU $300 MILLION FEE FOR DOING THIS.SO THEY'RE REALLY TAKING ADVANTAGE OF EVERYONE ELSE. NOW, I MEAN I COULD DO IT, TOO, BECAUSE I'M A LARGE BONDHOLDER BUT I'VE TURNED THAT DOWN NOT BECAUSE I'M SUCH A WONDERFUL PERSON NECESSARILY, BUT BECAUSE I THINK IN THE LONG RUN THEY'RE HURTING THE COMPANY. WHEN YOU SEE SOME OF THE LARGER BONDHOLDERS, THEY CAN TAKE ADVANTAGE OF THAT $300 MILLION GIFT AND SELL THEIR BONDS AND MAYBE THAT'S WHAT THEY PLAN TO DO, BUT I DON'T THINK THAT'S GOOD FOR THE COMPANY AND I DON'TTHINK IT'S GOOD FOR THE SYSTEM.
LEE: LET'S SAY, CARL, THAT YOU SUCCEED, WHAT IS YOUR VISION FOR THE COMPANY AS A GOING CONCERN BECAUSE PART OF YOUR PRESS RELEASE SAID SPECIFICALLY THAT IF YOU RUN OFF THE ASSETS WHICH ARE CASH GENERATING ASSETS, THEYCOULD BE WORTH 80 CENTS TO 85 CENTS ON THE DOLLAR. DOES THAT PLAN IMPLY THAT YOU WILL ACTUALLY RUN OFF THESE ASSETS, SELL THEM?
ICAHN: WELL, IF, I'M NOT HERE TO SAY WE'RE GOING TO GET CONTROL OF IT.WE WANT TO SEE IT GO INTO TRADITIONAL BANKRUPTCY, RUN OFF MOST OF THE ASSETS. INTERESTINGLY, THE COMPANY THINKS THEY SHOULD BE RUN OFF, TOO, BUT IN THEIR PLAN THERE'S NO RESTRICTIONS ON THEM DOING IT, SO YOU RUN OFF A LOT OF THESE ASSETS, MELISSA.AS YOU RUN THEM OFF, I BELIEVE YOU WILL GET THAT. ALSO, I'M NOT AGAINST TRYING TO SEE, AND THEY HAVE CERTAIN PLATFORMS TO DO FACTORING, I'M NOT AGAINST TRYING TO SEE IF THAT WORKS BUT I DON'T LIKE SPENDING WHAT THE COMPANY WOULD HAVE YOU DO, SPENDING BILLIONS OF DOLLARS WAITING TO SEE IF THE GOVERNMENT IS GOING TO GIVE YOU BACK YOUR BANK CHARTER AND THAT'S WHAT I'M AGAINST, JUST WASTING $2 BILLIONOR $3 BILLION. THE LITTLE BONDHOLDER, THE LITTLE BONDHOLDER NOW HAS AN ABILITY, AND WE HOPE THEY WILL CALL US, AND HAS THE ABILITY TO TAKE ADVANTAGE OF THE SITUATION AND WE HOPE THAT THEY DO IT.
LEE: CARL, I HAVE READ THROUGH YOUR PRESS RELEASE.IN IT YOU ALSO POINTED OUT YOU WILL BE ASSISTING FINANCIAL ADVISERS WHO ASSIST IN CASTING THE VOTE IN YOUR FAVOR BY PAYINGTHEM $5.ACCORDING TO SOME PEOPLE I HAVE TALKED TO, THEY ARE SAYING THAT THAT'S AKIN TO BUYING VOTES. IS THAT TRUE?
ICAHN: NO, I DON'T THINK IT'S AKIN TO BUYING VOTES --
LEE: YOU'RE OFFERING THEM MONEY TO HELP.
ICAHN: WE'RE SAYING IF THE BROKER IS HELPING AND DOING IT AND THAT HAPPENS VERY OFTEN IN TENDER OFFERS, THE BROKER GETS A FEE. YOU KNOW, IT'S A BIT OF A RUSH THING, AS YOU SAID.
LEE: RIGHT.
ICAHN: AND WE JUST HOPE THAT WE CAN GET ENOUGH NUMEROSITY TO STOP THIS -- WHAT I CONSIDER TO BE A REPREHENSIBLE APPROACH BY THE COMPANY.THEY'RE PAYING A FORTUNE TO --
LEE: SURE.
ICAHN: THEY'RE PAYING A FORTUNE TO ADVISORS WHAT HAVE YOU SO WE HOPE YOU CALL AND THE NUMBERS TO CALL IF PEOPLE NEED ADVICE WOULD BE CALL VINCENT AT 212-702-4328.
LEE: THIS IS NOT A PUBLIC SERVICE --
ICAHN: I WANT TO GET MY LITTLE ADVERTISING IN. COME ON --
LEE: I GET THE DEAL, CARL. GOT TO ASK YOU ONE LAST QUESTION. YOU RESIGNED FROM THE YAHOO! BOARD LAST WEEK. ARE YOU IMPLYING THAT PERHAPS YAHOO!'S STOCK AT THIS POINT IS FULLY VALUED?
ICAHN: NO, I'M NOT SAYING THAT AT ALL.WE DON'T DISCUSS WHAT WE DO AT A PORTFOLIO.I THINK THE DEAL WITH MICROSOFT WAS A GREAT DEAL. I DON'T TALK ABOUT SHORT-TERM MOVES AND I DON'T THINK ANYBODY IS SMART ENOUGH TO TALK ABOUT THAT, BUT I DO THINK WE HAVE A GREAT CEO IN CAROL BARTZ. I THINK THAT YOU DON'T NEED AN ACTIVIST IN THERE ANYMORE. SHE'S TAKEN OVER IT.THE MICROSOFT DEAL IS A GREAT DEAL. BUT IM NOT GOING TO TALK ABOUT SHORT TERM.
LEE: ALWAYS A PLEASURE TO TALK TO YOU.
ICAHN: THANKS, MELISSA.
LEE: DON'T GO ANYWHERE, WE WILL TRADE CARL ICAHN'S COMMENTS ON THE OTHER SIDE OF THIS BREAK.
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