Motorola May Spin Off Mobile Division
Icahn Proposes Own Slate Of Directors
By Todd Spangler & Mike Farrell -- Multichannel News, 2/1/2008 5:29:00 AM
Motorola may separate its mobile devices division -- whose declining sales have dragged down the company’s financial performance for more than a year -- from its other businesses.
The company said it is “exploring the structural and strategic realignment of its businesses to better equip its Mobile Devices business to recapture global market leadership and to enhance shareholder value.”
Motorola said it does not intend to discuss developments in the process of considering whether to spin off the mobile unit, “unless or until its board of directors has approved a definitive transaction or the process is otherwise complete.” The company noted that there’s no assurance any transaction will occur or what the terms might be.
Meanwhile, one of Motorola’s most outspoken critics, activist investor Carl Icahn, put forth his own slate of directors for the troubled tech giant Friday, including former Viacom CEO Frank Biondi.
Motorola president and CEO Greg Brown, who took the reins Jan. 1 after Ed Zander stepped aside as CEO last November, noted that the company wants to explore “ways in which our Mobile Devices Business can accelerate its recovery and retain and attract talent while enabling our shareholders to realize the value of this great franchise."
In a press release, Icahn, who owns about 3% of Motorola shares, proposed Biondi, investment banker William Hambrecht, Massachusetts Institute of Technology Thomas Lord Professor of Materials Science and Engineering Lionel Kimerling and Icahn Investments managing director Keith Meister as his candidates for Motorola’s board of directors.
“I am confident that the individuals on our slate have the necessary skills to assist Motorola in executing on its recently announced, and long over due, decision regarding the separation of its Mobile Devices business in a manner which will maximize value for all shareholders,” Icahn said in a statement. “Furthermore, I believe that our slate of new candidates is necessary in order to help insure that the board moves aggressively to confront the many challenges Motorola faces in a highly competitive marketplace.”
This is the second time Icahn has proposed his own slate of directors for Motorola. Last year. he attempted to obtain a seat on the Motorola board for himself, which resulted in what he called an “unnecessary proxy fight.”
Icahn’s proposal was scrapped after he was unable to garner enough support from other investors, who opted to give Motorola’s existing management more time to work out its problems.
“We are all painfully aware where that leadership has taken Motorola,” Icahn continued in the statement. “I hope that this year, rather than launching another battle, Motorola will instead elect to add my nominees to the board and avoid another wasteful struggle, the only effect of which is for Motorola's board to seek [at shareholder expense] to deny Motorola the services of qualified individuals who I believe will help Motorola to succeed.”
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