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Carl Icahn Not Done Yet – Still Fighting the Likes of Trump and Ackman

April 19, 2011
CARL C. ICAHN chases deals the way a dog chases cars. The guy just won’t quit. Talk to him for three minutes, and you get the feeling he couldn’t quit if he wanted to.

“What else would I do? Play shuffleboard somewhere?” Mr. Icahn grumbles into the phone from his vacation home in Indian Creek, Fla., the rarefied enclave near Miami.

It’s an old line, the one Mr. Icahn huffs, with over-my-dead-body pique, just about every time the subject of retirement comes up. No, at age 75 and a billionaire several times over, Carl Icahn will not go quietly.

Mr. Icahn has spent four decades making trouble for corporate America — and making a lot of money for himself and his investors. But now, midway through his eighth decade, he has begun to contemplate his legacy, and the future of the Icahn empire hangs in the balance. What will they say about him? He bristles at being called a corporate raider, though if you Google the phrase you’ll soon find his name. He prefers something friendlier: activist investor.

So behold the raider — or the activist, take your pick — in winter: rich, yes, but so entranced by the game that he can’t quite let go. One of his chief lieutenants, an up-and-comer, recently abandoned him: Keith A. Meister, widely considered his right-hand man, left the fold late last year. Mr. Meister was a pivotal player at Mr. Icahn’s multibillion-dollar hedge fund, as well as at his flagship Icahn Enterprises, his investment holding company. But with $250 million from George Soros, Mr. Meister opened a hedge fund of his own. He was joined in January by Rupal Doshi, formerly chief operating officer of the Icahn Group. (Both declined to comment for this article.)

“MR. ICAHN is on the line.”

That is a phrase to send chills through almost any chief executive. Last December, such a call came through at the Chesapeake Energy Corporation in Oklahoma City. That month Mr. Icahn announced that he had accumulated a 5.8% in the company.

Chesapeake’s chief executive, Aubrey K. McClendon, met with Icahn to discuss his concerns over how much the company was spending and its valuation. Two months later, McClendon disclosed plans to sell $5 billion in assets and other changes to increase the company’s value. Mr. Icahn bought in at $21. Chesapeake’s stock price closed at $32.73 on Friday.

McClendon declined to say whether Icahn had shaped his thinking.

“We have appreciated his interest in Chesapeake, are happy he is up almost 50% on his investment, and have nothing but the utmost respect for him,” Mr. McClendon says.

Mark Hanson, an analyst at Morningstar, says there’s little doubt Icahn influenced Chesapeake. The plan the company presented in February was drastically different from the one it had in December, before Icahn arrived on the scene, he said.

William A. Ackman, who runs the New York hedge fund company Pershing Square Capital Management, is in some ways one of Icahn’s figurative heirs in activist investing. But he, too, has crossed swords with Icahn. For the last seven years, Ackman has contended that Icahn owes him more than $8 million stemming from an investment in a Dallas real estate company, Hallwood Realty.

The New York Supreme Court ruled in favor of Ackman in August 2005, as did an appellate court in October 2006. A final appeal is pending.

But Icahn vows he will go all the way to the United States Supreme Court. “How many times have judges been wrong? How many people have gone to the death chamber because they’re wrong?” he asked. “Ackman is dead wrong.”

Mr. Ackman says he is confident he will prevail. In the meantime, Icahn must pay him hefty interest while the payment is delayed. “It grows at about 9% a year,” Ackman said.

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