Published On: Mon, Feb 10th, 2014

Carl Icahn Now Aligned With Apple Board & Management Over Stock Buy-backs

Carl Icahn is a savvy player of the game, and he knows when to fold his cards without a fight.

Yesterday Institutional Shareholder Services, which advises institutional shareholders on corporate governance issues, came out against his proxy proposal for Apple to radically expand its shareholder repurchased plans. The proposal was to be presented to Apple’s shareholders at its Annual General Meeting on February 27th.

2nd Annual "David Moore's Funny Business Show"
Carl Icahn / Getty

So today he was, for once, the complete diplomat and wrote another open letter to Apple shareholders on his web site, this time withdrawing his own proposal. While the letter is a good deal shorter than many of his missives, it still waffled a fair bit. Here are the important bits:

“While we are disappointed that last night ISS recommended against our proposal, we do not altogether disagree with their assessment and recommendation in light of recent actions taken by the company to aggressively repurchase shares in the market.”

Since the ISS had said Apple has already picked up US$32 billion of its own shares in the last year, Icahn highlights this in his letter, then concedes that his proposal “thus effectively only asks the board to spend another US$18 billion on repurchases in the current year.”

Icahn then continues… “As Tim Cook describes them, these recent actions taken by the company to repurchase shares have been both “opportunistic” and “aggressive” and we are supportive. In light of these actions, and ISS’s recommendation, we see no reason to persist with our non-binding proposal, especially when the company is already so close to fulfilling our requested repurchase target.”

Ignoring the repetitions, Carl Icahn is therefore now lining up with management and the Apple Board, and Icahn closes his note reiterating that “in light of Tim Cook’s confirmed plan to launch new products in new categories this year (in addition to an exciting product roadmap with respect to new products in existing categories), we are extremely excited about Apple’s future.”

One up for Tim Cook therefore; well done – some dragons do not slay so easily.

Having plunked down over US$3 billion of his own, and his investors’, money to buy into Apple’s future it is nevertheless good to see Carl Icahn now fully in support of the company’s plans; at least for the moment.

Now it is up to Apple to deliver. If Apple should ever wish to add a financial player from Wall Street to their Board, they could probably do a lot worse than consider co-opting Icahn for the role.


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