Seagate Technology - Fundamentals Message Board

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Technology Stocks : Seagate Technology - Fundamentals

STX 285.23

+0.9%

Dec 24 12:59 PM EST

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To: Z Analyzer who wrote (1813)	5/11/2000 2:12:00 PM
From: Mark Madden	Read Replies (1) of 1989

The market didn't seem to notice or care about Carl Icahn's move because the SEG stock price is still tracking VRTS. IMVHO this changes things a lot. I do not remember Icahn's tactics in the 80's when took over companies and sold them for the parts but he must have been a value investor and he must have a lot of take-over knowledge. My first guess is he would be willing to purchase large quantities of stock and try to negotiate green-mail. Many companies in his sights are willing to buy back his stock for a much higher price to keep him from taking over the company. Although SEG fits in this category they can not pay green mail while contending going private is in the best interest of the stockholders. As many have noted Icahn is not considering this move for the $2 gain when the deal is closed (although it could be huge with enough stock involved). Other factors move the stock more than $2 each day. I think that any large payoff to Icahn at this stage would negatively impact SEG's deal with VRTS because those costs would come directly from the VRTS gains of getting cash and securities above $800 million. Doesn't this mean SEG can not offer green-mail and Icahn will proceed further? Icahn may be evaluating the pieces of SEG right now. He could be shopping the desktop drive business, the enterprise drive business, the tape drive business the software business the consumer drive business and many other components. The cash and investments alone will almost return his investments. I think the value exists to encourage him to go further. This could be the easiest take-over Icahn ever did. Normally I would expect a tender offer at 35 to 50 percent above the market value but in this case he may not need to do this. If he proposed a new Board of Directors and new management with proven leadership he would probably get the votes. He wouldn't even have to lie about the existing leadership being late to market, surrendering market share and taking their own interests before that of the shareholders. The stockholders would welcome an alternative to the "take what we give you and be happy" attitude they have received from the existing management. Any ideas? Regards, Mark

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