Icahn scores lucrative victory in MedImmune sale
Monday April 23, 5:43 pm ET
By Dane Hamilton
NEW YORK (Reuters) - New York financier Carl Icahn once again demonstrated his skill at corporate activism with Monday's sale of MedImmune Inc. (NasdaqGS:MEDI - News), which added to $1 billion made on the sale of four Nevada casinos, also announced today.
The 71-year-old, who Forbes estimates is worth $13 billion, is netting at least $300 million in gains for his hedge fund from the pending sale of the vaccine maker to AstraZeneca Plc (LSE:AZN.L - News) for $15 billion, a person familiar with the matter said.
The deal came after Icahn, who just this year built up a stake of more than 10 million shares in the vaccine maker, told the company that he planned to run a proxy campaign to get a new board slate if it did not agree to seek a buyer.
"This proves again that activism does work to enhance value for all shareholders," Icahn said adding that he and intends to support the transaction.
In an interview, the financier declined to discuss his stock gains for MedImmune, which surged 18 percent on Nasdaq on Monday. Icahn credited Alex Denner, a former Morgan Stanley (NYSE:MS - News) biotechnology fund manager and PhD who now works for Icahn's hedge fund, for finding the investment.
A person familiar with the matter said Icahn roughly doubled the value of his MedImmune investment, buying into the stock when it was around $30 a share a few months ago.
The gain add to $1 billion Icahn said he made when his publicly traded real estate entity, American Real Estate Partners LP (NYSE:ACP - News), sold its Nevada gaming operations for about $1.3 billion in a deal disclosed on Monday. Icahn holds a 90 percent stake in ACP.
VETERAN ACTIVIST
The deals demonstrate that Icahn, who cut his teeth as a corporate raider in the 1980s, hasn't lost his edge, even if not all his investments pan out.
But generally, when Icahn takes a position in a company and begins a campaign, the stock moves up, based on investors' views that Icahn has the financial wherewithal and tenaciousness to force changes on companies.
"He gets in and the share prices move upward," said Ken Squire, who runs 13D Monitor, a consulting firm specializing in shareholder activism issues.
In a recent analysis, Squire calculated that Icahn has generated returns of 115.9 percent in 11 investments that were large enough to prompt a regulatory filing. The biggest return by far is from Icahn's ACP holding, which has grown by more than 13 times since 1995, with Icahn buying into the stock at $8.31, according to 13D Monitor. It traded at $108 on Monday.
"He's been around for a long time and is very successful," said Scott Berman, a hedge fund lawyer at Friedman Kaplan Seiler & Adelman who has represented Icahn in the past. "He's smart and tough and that gives him heft."
And Icahn is now more active than ever with his brand of activism, which usually entails buying a large stake in a company he deems to be an underperformer and demanding changes, such as a sale, stock buyback or other moves. His moves have spawned a host of imitators among the ballooning legions of newly minted hedge fund managers.
In recent months, Icahn has offered to buy WCI Communities Inc. (NYSE:WCI - News), a luxury homebuilder in which he holds 14.5 percent. He also has a bid outstanding for auto parts maker Lear Corp. (NYSE:LEA - News) over the objections of other stockholders.
The Queens-born billionaire achieved another major success this year when forest products maker Temple-Inland Inc. (NYSE:TIN - News) agreed to sell assets and break up under pressure from Icahn. ImClone Systems Inc. (NasdaqGS:IMCL - News) shares are up 30 percent since he was appointed chairman after a corporate dust-up last year.
"The bottom line is that he's a good stock picker," said one analyst at a proxy solicitation firm who declined to be identified because the firm is working for companies that Icahn has targeted.
"He has developed the credibility that he will consummate and he doesn't back down," the analyst said. "His message of enhancing shareholder value is hard to ignore for company managers because you don't like the messenger." |
