Icahn vs. Lipton

August 29th, 2008
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Marty Lipton, lawyer and long time rival of Carl Icahn has recently made comments to the tune that because companies are changing corporate policy in response to share holder activism they are vulnerable to take over and in a sense weakening corporate America. He cited the example of Anheuser-Busch, stating that because it allowed yearly elections of directors rather than elections every three years as it had previously done, the company was subject to a hostile takeover by the Belgian beer maker InBev. Mr. Icahn believes the Mr. Lipton is `anti-shareholder' and is only trying to protect managers whose ill-planned ventures weakened the company in the first place. Mr. Icahn argues that shareholder activism is allowing the US to stay relevant in a time when the threat of foreign companies outpacing US ones, is quickly becoming a reality. Shareholder activism, he argues, happens because managers have fallen behind the times. In the case of InBev, the buyout seemed like a good deal for everyone at $70/share, especially since it sent the share price soaring. Personally speaking, managers should not be protected from the scrutiny of shareholders; however activist hedge funds wanting to turn a quick buck by replacing management for issues they fully don't understand is not the best solution either. There should be more regulation for activism such as a minimum holding period for the stocks after they are allowed to enter into a proxy battle. It is also interesting to note that some activist hedge funds have begun to hire ex-corporate managers to advise them on the best ways to run the company rather than profiting quickly from the market stirrings that inevitably swirl around any purchase that such big names take.
For Detailed Investor Profiles on these Investors, click below:
Icahn Associates (Carl Icahn)
Related People: Alexander J. Denner; Brett Icahn; Carl Icahn; Keith A. Meister*
Related Entities: High River Limited Partnership; Icahn Partners; Icahn & Co Inc; Icahn Associates; Icahn Enterprises (formerly American Real Estate Partners); Icahn Fund Ltd; Icahn Partners LP

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