Icahn Steps Up Motorola Campaign With Newspaper Ad (Update1)
By Marcel van de Hoef
May 1 (Bloomberg) -- Billionaire investor Carl Icahn published a letter to Motorola Inc. shareholders as a full-page advertisement in today's Wall Street Journal, stepping up his campaign to get a seat on the company's board.
The world's second-biggest maker of mobile phones is a ``troubled company'' that has ``stumbled badly'' under the leadership of Chief Executive Officer Ed Zander, Icahn wrote in the letter. The Schaumburg, Illinois-based company's shareholders will vote on the board at the annual meeting on May 7.
``Motorola has suffered a critical failure in oversight and leadership that must be addressed,'' Icahn said, citing a plunge in Motorola's share price in the past six months. Motorola opposes the nomination of Icahn, who controls 2.9 percent of the company's stock.
Shares of Motorola have lost 25 percent in the past six months, leaving the company with a market value of $41.4 billion. The Standard & Poor's 500 index rose 7.6 percent in the same period.
Icahn, 71, has said he plans to use a board seat to pressure Motorola executives to improve profit margins at its mobile-phone business and eventually return more cash to shareholders. In today's letter, he didn't provide additional details on his plans as a director.
Losing Market Share
Motorola reported a loss for its most recent quarter and the first sales drop in four years after losing market share to Nokia Oyj and Samsung Electronics Co.
As part of the battle, both Zander and Icahn have sent several letters to shareholders to gain their support. Motorola says Icahn lacks technology experience and won't simply add him as a director to avoid a proxy fight. In today's letter Icahn said his ``skills and abilities'' and his ``talents and experience'' would strengthen the board.
The billionaire began campaigning for a board seat in January and started a proxy fight in March because Motorola wouldn't endorse his nomination. The founder of Icahn Partners LP owns more than 68 million Motorola shares, making him the sixth-largest shareholder, according to data compiled by Bloomberg.
Institutional Shareholder Services, an advisory firm, recommended on April 25 that shareholders vote for Icahn, saying Motorola has ``significantly'' underperformed its peers.
Glass, Lewis & Co., another advisory firm, has sided with Zander.
To contact the reporter on this story: Marcel van de Hoef in Amsterdam at mvandehoef@bloomberg.net |
