1. Japan's trade minister, Akira Amari, wants to block the London-based hedge fund TCI from buying up to 20% of the equity in the country's leading electricity wholesaler.
TCI now owns 9.9% of the company, known informally as J-Power, because 10% is the cap beyond which acquisitions in certain industries deemed essential to national security require government approval in that country.
Mr. Amari said he doesn't believe his stand should be taken as any indication that Japan is closing itself to foreign investment. "J-Power is involved in a nuclear power plant project and operates power lines linking Japan's four major islands; all these could affect public order and daily life."
2. The annual meeting of Motorola this year will come off early next month without a proxy fight, now that the company has patched things up with investor Carl Icahn.
Icahn's taken a beating on MOT's stock price of late. His SEC filings indicate he's paid an average of $14.41 a share for the 144.56 million shares of the company he owns. The market price at the close of business yesterday was $9.49. So let's break out the calculator. A loss of $4.92 in the value of each share, times 144.56 million? that adds up to a loss of more than 711 million. Pretty soon, even for Icahn, you'll be talking real money.
Of course, that's only a paper loss. Icahn now has representatives on the board, and he hopes to introduce changes that will turn around the recent price slide.
3. SCSF Equities, a private-equity firm based in Boca Raton, Florida, now says that it wants to replace three of the members of the board of directors of Furniture Brands, of St. Louis, MO.
Their three nominees are: T. Scott King; Ira Kaplan; Alan Schwartz. Mr. King is the managing director of Sun Capital Partners Inc., which is the parent company of SCSF. Ira Kaplan is the barely-retired CFO of Claire's Stores Inc. The surprise in this list, the one that makes me sit up and take notice, is Alan Schwartz.
Schwartz is a distinguished academic student of corporate governance. He's been a professor at Yale University since 1987 -- teaching both at the law school and at the management school there. What's he doing in this fight?
We may try to figure that out together next week, fellow spectators. See ya Sunday.
Showing posts with label Motorola. Show all posts
Showing posts with label Motorola. Show all posts
Wednesday, April 9, 2008
Tuesday, March 25, 2008
Motorola
Motorola has scheduled its annual meeting for May 5. There might be a lot of fireworks between now and then, because Carl Icahn, no less, wants four seats on their board -- one-third of the total.
Motorola has offered him two seats. Icahn isn't in the mood for compromise and has turned that down.
Aside from the vote on who sits where, the meeting will also include a resolution to recoup unearned management bonuses. This looks like a turn-the-heat-up tactic on Icahn's part. The proposed resolution asks the board to seek to "recoup all unearned incentive bonuses or other incentive payments to all senior
executives to the extent that their corresponding performance targets were later
reasonably determined to have not been achieved or resulted from error(s)."
Icahn has also brought a lawsuit for access to documents. Delaware law requires that a demand for inspection have a specific basis -- the investor making such a demand can't be on a fishing expedition. On the basis that this is exactly what Icahn is doing, Motorola will contest the matter.
The stock price, by the way, has fallen dramatically over the last five months, from above $19 to below $10.
That might lead one to suppose, "gee, they must have lots of dissatisfied investors on their hands, so maybe the ground is fertile for Icahn's challenge."
It ain't necessarily so, though. The investors who are the most disgruntled about Motorola's management are those who would have been most likely to sell already -- to sell out at some point between $19 and $10. So those who still had stock as of the record date earlier this month, almost by definition, are those who believe that the problems are short-term and have some faith in a turnaround.
A real shake-out price drop on this scale, in other words, might be good news for a would-be self-entrenching management.
Actually, I have no idea. I'll know when you folks do.
Motorola has offered him two seats. Icahn isn't in the mood for compromise and has turned that down.
Aside from the vote on who sits where, the meeting will also include a resolution to recoup unearned management bonuses. This looks like a turn-the-heat-up tactic on Icahn's part. The proposed resolution asks the board to seek to "recoup all unearned incentive bonuses or other incentive payments to all senior
executives to the extent that their corresponding performance targets were later
reasonably determined to have not been achieved or resulted from error(s)."
Icahn has also brought a lawsuit for access to documents. Delaware law requires that a demand for inspection have a specific basis -- the investor making such a demand can't be on a fishing expedition. On the basis that this is exactly what Icahn is doing, Motorola will contest the matter.
The stock price, by the way, has fallen dramatically over the last five months, from above $19 to below $10.
That might lead one to suppose, "gee, they must have lots of dissatisfied investors on their hands, so maybe the ground is fertile for Icahn's challenge."
It ain't necessarily so, though. The investors who are the most disgruntled about Motorola's management are those who would have been most likely to sell already -- to sell out at some point between $19 and $10. So those who still had stock as of the record date earlier this month, almost by definition, are those who believe that the problems are short-term and have some faith in a turnaround.
A real shake-out price drop on this scale, in other words, might be good news for a would-be self-entrenching management.
Actually, I have no idea. I'll know when you folks do.
Sunday, December 2, 2007
Three brief items
1. Motorola, a Fortune 100 communications company, announced that Ed Zander is stepping down as its CEO.
Zander will remain as chairman of the board until May, when the company holds its annual meeting. Carl Icahn has said for at least a year now that Zander wasn't right for the CEO job. He put out a statement Friday crowing a bit. Zander's departure is "long past due" etc.
But Zander himself was never the focus of Icahn's efforts at Motorola. He believes the best way to increase the value of the stock for shareholders like himself is to split it up -- make it a company focused tightly on mobile devices and spin off everything else.
My guess at the moment is that the new CEO, Greg Brown, won't be on board with Icahn's agenda any more than Zander was.
2. Readers may recall that here on November 20 I blogged about proxy access rules under consideration by the SEC.
Since then, the agency has made its choice. Its adopted the most restriuctive of the rules under consideration. In other words, it holds that company's can simply exclude from the ballot any shareholder attempt to re-write the company's ruiles concerning elections to the board of directors.
In general, this is bad news, not just for the Carl Icahns of the world but for corporate productivity in the US. This ruling will encourage incumbemnt managemnents to entrench themselves and resist pressures from outside. Entrenchment, as a rule, is a bad thing. Shake-ups are ghood things. Capitalism requires that the pot be kept boiling.
Creative destructive works like that. Protect yourself from the latter, you minimize the former.
3. More about Gyrodyne and Goldstein. As I mentioned Wednesday, Gyrodyne brought a lawsuit in federal court asking for an injunction so that Goldstein couldn't ruin their party this week. Their annual meeting is Wednesday and they don't want him soliciting proxies to replace three of them on the board with himself and two associates.
It's an 8-member board, so even complete success in terms of his slate won't give Goldstein a majority. But his slate would need only 1 convert to produce a tie vote, and deadlock, on a given issue.
At any rate, it appears that the district court refused to grant the injunction, so the solicitations continue.
The big issue? Poison pills. I'll discuss such "pills" in general in tomorrow's entry.
Zander will remain as chairman of the board until May, when the company holds its annual meeting. Carl Icahn has said for at least a year now that Zander wasn't right for the CEO job. He put out a statement Friday crowing a bit. Zander's departure is "long past due" etc.
But Zander himself was never the focus of Icahn's efforts at Motorola. He believes the best way to increase the value of the stock for shareholders like himself is to split it up -- make it a company focused tightly on mobile devices and spin off everything else.
My guess at the moment is that the new CEO, Greg Brown, won't be on board with Icahn's agenda any more than Zander was.
2. Readers may recall that here on November 20 I blogged about proxy access rules under consideration by the SEC.
Since then, the agency has made its choice. Its adopted the most restriuctive of the rules under consideration. In other words, it holds that company's can simply exclude from the ballot any shareholder attempt to re-write the company's ruiles concerning elections to the board of directors.
In general, this is bad news, not just for the Carl Icahns of the world but for corporate productivity in the US. This ruling will encourage incumbemnt managemnents to entrench themselves and resist pressures from outside. Entrenchment, as a rule, is a bad thing. Shake-ups are ghood things. Capitalism requires that the pot be kept boiling.
Creative destructive works like that. Protect yourself from the latter, you minimize the former.
3. More about Gyrodyne and Goldstein. As I mentioned Wednesday, Gyrodyne brought a lawsuit in federal court asking for an injunction so that Goldstein couldn't ruin their party this week. Their annual meeting is Wednesday and they don't want him soliciting proxies to replace three of them on the board with himself and two associates.
It's an 8-member board, so even complete success in terms of his slate won't give Goldstein a majority. But his slate would need only 1 convert to produce a tie vote, and deadlock, on a given issue.
At any rate, it appears that the district court refused to grant the injunction, so the solicitations continue.
The big issue? Poison pills. I'll discuss such "pills" in general in tomorrow's entry.
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