Icahn’s Motorola Patents Push Adds $600 Million to His Stake

Monday, 15 Aug 2011 01:07 PM

 

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Billionaire Carl Icahn’s efforts to get Motorola Mobility Holdings Inc. to review options for its patents added almost $600 million to the value of his company stake following Google Inc.’s $12.5 billion buyout.

Icahn and his affiliates hold 33.5 million shares, the equivalent of an 11.4 percent stake, in the Libertyville, Illinois-based mobile-phone manufacturer. That stake is now valued at about $1.34 billion under the deal announced today, in which Google will acquire Motorola Mobility for $40 a share in cash.

The activist investor, who manages his own money through New York-based Icahn Capital LP, disclosed in a regulatory filing last month that he had met with Motorola Mobility to urge management to “explore alternatives” for the company’s more than 17,000 patents. On July 20, the first day that Icahn reported having discussions with Motorola Mobility, company shares closed at $22.41, giving his stake a total market value of about $750.9 million.

“Motorola is activism at its best,” Icahn, 75, said today in a news release. “We have been strong proponents of the company exploring multiple ways to enhance the value of its patent portfolio.”

Icahn’s initial meeting with Motorola last month followed a July 1 announcement that a group of six technology companies, including Apple Inc., Microsoft Corp. and Sony Corp., would pay a combined $4.5 billion to acquire more than 6,000 patents from Nortel Networks Corp.

‘Significant Value’

Motorola Mobility’s “patent portfolio, which is substantially larger than Nortel Networks’ and includes numerous patents concerning 4G technologies, has significant value,” Icahn said in a document filed July 21 with the U.S. Securities and Exchange Commission. “There may be multiple ways to realize such value given the current heightened market demand for intellectual property in the mobile telecommunication industry.”

Icahn’s press release today didn’t mention whether he played a role in brokering the deal between Motorola and Google, and he didn’t immediately return a telephone call seeking comment. Icahn acquired a stake in Yahoo! Inc. in 2008 and unsuccessfully tried to resuscitate a deal between the company and Microsoft, which had previously bid more than $40 billion for the Web portal.

In February 2008, Icahn and his affiliates reported that they had purchased 114.3 million shares of Motorola Inc. for $1.78 billion, or about $15.58 a share. He subsequently added to his stake and pushed the company to separate into Motorola Mobility and Motorola Solutions Inc. -- a step that was completed in January.

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