Icahn Fires Back At Motorola
Says Split Is Needed, Leery of Motorola’s Commitment
By Mike Farrell -- Multichannel News, 3/27/2008 4:05:00 AM
Motorola’s announcement earlier this week that it would split into two businesses on the surface would seem to appease activist investor Carl Icahn, who has pressed for the separation for more than a year, but that would be assuming too much.
Icahn, who has accumulated a 6.4% interest (145 million shares) in the electronics giant over more than a year, fired off a missive to Motorola management March 26, expressing dismay that the separation would take more than a year to complete, and disputing company claims that he rejected outright the company’s proposal to accept two of his board nominees if he would drop his long-standing proxy fight against the company. The letter was filed that day with the Securities and Exchange Commission.
Icahn stated that the split is long overdue and is needed, but he wondered why it would take until 2009 to complete. And he voiced other concerns.
“Why does it take the threat of a proxy fight for you to make promises we all want to hear?” Icahn asked, adding that he wondered if the board will actually go through with the split, “or will it be a repeat of last year’s proxy fight, strewn with a string of broken commitments?”
Icahn also took exception to a comment by Motorola CEO Greg Brown on the 
March 26 conference call announcing the split. On that call, Brown said that Motorola had discussed board nominees with Icahn and proposed two potential directors but the investor declined.
Icahn, in his letter conceded that he had spoken with the head of Motorola’s board nominating committee Sandy Warner about the nominees, adding that he would gladly accept the terms if the board would also appoint Icahn Enterprises vice chairman Keith Meister. Warner, Icahn said, replied that Meister was not “qualified.”
It also is unclear which board nominees Motorola proposed. Earlier this year, Icahn put forth a slate offour directors for the company – former Viacom CEO Frank Biondi, investment banker William Hambrecht, MIT professor Lionel Kimerling and Meister.
“I asked Mr. Warner what does one have to do to qualify — lose $37 billion dollars?” Icahn’s letter stated. “Mr. Warner then replied that the board did not ‘know’ Meister. My answer was that Meister would fly anywhere at any time to meet the board so they could ‘know’ him (I did mention that the situation at Motorola is too serious for the board to remain a country club). My offer to Motorola stills stands.”
Icahn insisted that Meister would be a strong addition to the Motorola board, and also showed hints of his sense of humor.
“If as you have stated, we all want to benefit the stockholders of Motorola, then what possible reason is there for not putting Keith Meister on the board,” Icahn wrote. “After all, how much can he eat at the board meetings? On a positive side, having a highly intelligent, energetic individual like Keith, who has 145 million reasons to spend his time working toward the spin-off being accomplished, may well make this promise come true in a timely fashion.”
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