Icahn Likes H-P, Siebel, Rite Aid

Updated from 4:37 p.m. EDT

Shares of Rite Aid ( RAD), Siebel Systems ( SEBL) and Hewlett-Packard ( HPQ) perked up in a dismal market Friday when activist billionaire Carl Icahn disclosed new stakes in them and several other companies.

Icahn Partners said in a 13F with the Securities and Exchange Commission that it owns 10 million common shares of Rite Aid worth about $39.6 million; about 4.5 million shares of Siebel worth $41.3 million; and about 104,000 shares of H-P worth $2.2 million. All three stakes are new since Icahn's previous quarterly filing.

Rite Aid was recently up 15 cents, or 3.9%, to $4, while Siebel rose 47 cents, or 2.3%, to $20.62 and Siebel gained 10 cents, or 1.1%, to $9.69.

Separately, Tudor Investment has taken a much larger stake in Siebel. According to a filing made Wednesday with the SEC, Tudor purchased 24.2 million shares of the troubled software maker, a stake that represents 4.7% of the company's outstanding shares.

A source on Wall Street said the shares were purchased from Fidelity Investments, but that could not be confirmed independently.

Although the exact timing of when he acquired his newest holdings isn't known, Icahn bought into H-P during a time of substantial change at the technology giant.

H-P has been roiled this year by the very public dismissal of CEO Carly Fiorina stemming from a contentious takeover of Compaq and the subsequent difficulties that H-P has had in competing with the nimbler Dell ( DELL) and the broader IBM ( IBM).

The company responded by bringing in Mark Hurd to be the new CEO. He was previously the top executive at NCR and was highly regarded on Wall Street for his operational abilities.

As for what Icahn has planned for H-P, his stake is extremely minimal, representing only four-thousandths of a percent of the outstanding share base. Still, it does show that significant power players on Wall Street are taking an interest in what H-P is doing and where it is going.

"That doesn't surprise me at all," says Jeff Embersits, principal with Shareholder Value Management, a portfolio subadvisory firm that is long H-P '07 LEAPS, in noting the acquired stake. Icahn probably sees the potential for more costs to come out of H-P and that this will help the stock and the company over the long term, Ebmbersits says.

Icahn came to fame as a corporate raider in the 1980s but recently has seen his reputation improved as a deep-pocketed friend to shareholders. He won a bitter proxy war Wednesday against Blockbuster ( BBI), gaining three seats on its board after lambasting the company over its spending habits.

Icahn scored one of the triumphs of his career last month, leaning on management of Kerr-McGee ( KMG) until the energy company agreed to launch an above-market Dutch auction worth $4 billion. An Icahn group spent much of the spring inveighing against the company's diversification policy and said it needed to unlock value tied up in its oil reserves.

Rumors he had taken a Siebel stake recurred in the marketplace for weeks and was mentioned in a story on this site on May 5. On first blush, the company is a classic Icahn target, with management recently resisting shareholder calls for its sale and vowing an acquisition campaign of its own along with expansion into new markets.

According to the filing, Icahn raised his stake in two biotech companies: ImClone ( IMCL) and Telik ( TELK). The latter reported positive phase I data on a lung-cancer drug earlier Friday.

In all, the 13F covered stakes in 12 different companies, including previous Icahn holdings including Blockbuster, Kerr-McGee and Pogo Producing ( PPP).

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