After taking an over 30% stake in Lions Gate Film, Icahn tried to boost an existing multi-billion investment in MGM Studios, which he made as the legendary film studio veered towards bankruptcy.
In 2010, Icahn simultaneously built an over 30% stake in Lions Gate and was active in MGM takeover talks with Lions Gate, which would have created a to $5.5 billion movie making partnership. The merger wasn't completed and in November 2010, MGM decided to enter a pre-packaged bankruptcy sale to Spyglass Entertainment and convert its debt holders into shareholders. It turned Icahn into one of MGM's largest holders. Afterward, Icahn aggressively pursued an outright takeover of Lions Gate to add to his MGM stake in a bid that failed this August.
While Icahn may be unlucky in billion dollar acquisitions, he's seen big gains in large minority stakes that aren't a takeover ambition. Recent similar-sized minority stakes by Icahn in El Paso (EP) and Motorola Mobility (MMI) netted the investments mogul impressive returns when Kinder Morgan (KMI) and Google (GOOG) paid big premiums for the respective companies.
By taking smaller minority stakes in El Paso and Motorola Mobility this summer, Icahn pushed for increased shareholder returns through a spinoff of El Paso's exploration business and a sale of Motorola Mobility's patent portfolio. That understated activist role led both companies to undergo a strategic review of their businesses, which eventually led to outright sales to competitors, netting Icahn significant windfalls.With today's takeover announcement, Icahn may be looking for a similar result. "The reality behind this is maybe he is pushing for a sale of the company to an international steel company," said Louis Meyer a special situations analyst at Oscar Gruss & Sons in an phone interview with TheStreet. According to Meyer, the proposal may be a way to drum up takeover interest from large international steel players as big as ArcelorMittal (MT) and other conglomerates in related metals industries-- a scenario he counts as more likely than an eventual Icahn acquisition. Still to be seen is whether shareholders will approve Icahn nominated directors, not to mention whether they or the board will accept his takeover bid. Equally uncertain is whether Icahn's recent takeover appetite, an added complexity to his investor focus, will reap the same rewards as less aggressive minority bids. -- Written by Antoine Gara in New York
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