Carl Icahn now owns 6.3% of Motorola

Motorola is preparing for a second showdown with the activist investor Carl C. Icahn, who has increased his stake in the company ahead of a May battle over board seats.

Mr. Icahn disclosed in a regulatory filing Wednesday that his investment vehicles own about 142.4 million shares of Motorola, amounting to a 6.3 percent stake. In an early February filing, Mr. Icahn revealed a 5 percent stake and said he acquired the shares “in the belief that they were undervalued.”

Last month, Mr. icahn announced that he is running four candidates for Motorola’s board of directors at the annual shareholders meeting May 5, his second attempt to gain seats on the company’s board. Mr. Icahn led a contentious proxy fight last year for a seat on Motorola’s board, claiming that management had not done enough to raise the company’s stock price. While he was unsuccessful, his complaints prompted, in part, the departure of the chief executive, Edward J. Zander.

Motorola, which in recent years has been unable to capitalize on the success of its popular Razr phone, said last month that it was exploring the possibility of selling or spinning off its cellular phone business as a way to unlock profit.

While a spin-off the handset business has been one of Mr. Icahn’s major themes, the company denied that its decision to entertain the notion was prompted by the activist investor’s campaign.

Now, Motorola has indicated that it is prepared to fend him off again.

In a proxy statement filed Wednesday, the company’s board reminded shareholders that “the Icahn nominees have not been endorsed by your board of directors. We urge stockholders not to vote any proxy card that you may receive from the Icahn entities.”

source:http://dealbook.blogs.nytimes.com/2008/03/07/motorola-and-icahn-gird-for-second-round/?ref=technology
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