Carl Icahn Made 66% on Lawson Deal: What's His Next Move?

by: GuruFundPicks

Carl Icahn, a well-known American financier, corporate raider, and ‘activist’ hedge fund manager recently orchestrated the sale of Lawson Software Inc. (NASDAQ:LWSN) to Golden Gate Capital, a private equity fund, for $11.25 per share. Icahn through his hedge funds, Icahn Capital LP and Icahn Associates Corp., held 17 million shares or 10.4% of the outstanding shares of LWSN that it started purchasing last April at $6.63. The company was a top 10 holding for Icahn’s hedge funds and as of the last filing, he held over $200 million of the company’s shares.

Carl Icahn is widely known as an ‘activist’ investor, meaning that he takes large stakes in distressed public corporations, and then uses his influence resulting from the ownership to effect change at these companies, eventually in many cases selling them for a tidy profit. In the past, he has taken substantial or controlling positions in RJR Nabisco, TWA, Texaco, Philips Petroleum, Western Union, Gulf & Western, Viacom, Uniroyal, Dan River, Marshall Field, American Can, USX, Marvel Comics, Revlon, Imclone, Federal-Mogul, Fairmont Hotels, Blockbuster, Kerr-McGee, Time Warner and Motorola.

In fact, Motorola is currently Icahn's largest holding. As of the last filing on 12/31/10, his funds held $2.43 billion of Motorola shares. After the Lawson sale, the next question in the minds of most investors is whether Icahn will now try to find a suitor for Motorola Solutions (NYSE:MSI).

The following is a brief summary of the combined top holdings of the two funds as of December 31st of 2010:



Market Value
(as of 12/31/10 at time of filing)

Percent Outstanding Shares Controlled By Icahn Funds

Motorola (now Motorola Solutions)

MOT but now MSI

$ 2,431 million


Federal Mogul Corp.


$ 1,554 million


Biogen Idec Inc.


$ 1,078 million


Genzyme Corp. (since acquired by Sanofi Aventis)


$ 933 million


Chesapeake Energy Corp.


$ 676 million


Lions Gate Entertainment


$ 292 million


American Railcar Industries


$ 256 million


Amylin Pharmaceuticals


$ 212 million


Mentor Graphics


$ 193 million


Lawson Software


$ 156 million


Take-Two Interactive


$ 150 million


As can be seen, Icahn’s largest holdings include Motorola Solutions (MSI), Federal Mogul Corp. (NASDAQ:FDML), Biogen Idec Inc. (NASDAQ:BIIB) and Sanofi Aventis (NYSE:SNY). In the three months ending December 31st of 2010, Icahn’s funds cumulatively did not open any new positions. The fund increased its holdings in MSI, Chesapeake Energy Corp (NYSE:CHK), Amylin Pharmaceuticals (AMLN), Hain Celestial Group (NASDAQ:HAIN), LWSN, Commercial Metals Co. (NYSE:CMC), Enzon Pharmaceuticals Inc. (NASDAQ:ENZN), and Navistar Intl Corp. (NYSE:NAV). Also, the Icahn funds reduced its holdings in Masco Corp (NYSE:MAS) and Cadence Design Systems (NASDAQ:CDNS).

Carl Icahn is a very savvy investor, he is worth over $12.5 billion and is ranked 24th in the Forbes list of 400 richest Americans. While he works only for investors in his hedge funds, a savvy investor can ride his ‘coattails’ with a knowledge of his holdings and reap the rewards (as many did with LWSN recently) when Icahn orchestrates an exit strategy for his fund, including selling the company. Besides MSI, Icahn is believed to also be actively engaged in Biogen (BIIB), seeking to possibly acquire, break up, and/or sell off various parts of the company.

Credit: Historical fundamentals including operating metrics and stock ownership information were derived using I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and The information and data is believed to be accurate, but no guarantees or representations are made.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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