Carl Icahn to showbiz: Bye-bye. It’s been fun. Not.
The billionaire corporate raider has already bailed from Time Warner. Now he’s backing off his other major media play of the past year, Blockbuster Entertainment.
Icahn reportedly won’t seek control of the vidtailer at the company’s annual meeting next month. A year ago, at the 2005 meet, he and two allies won three Blockbuster board seats — but not control — in a nasty proxy battle.
Icahn had become the company’s single largest shareholder with a 16% stake. His election, and that of the other dissident directors, Ed Bleier and Strauss Zelnick, was spurred in part by Blockbuster’s slumping corporate stock price and profits and an uncertain future for the video biz overall.
Icahn’s timing was bad. Blockbuster’s stock has dropped 60% since he came aboard — a plunge that likely caught him off-guard. The company’s cash position was so shaky last year that rumors circulated of a possible bankruptcy filing.
But Icahn didn’t have any more insight than chairman-CEO John Antioco about how to turn the company around. When asked in interviews about his apparent failure at Blockbuster, the raider has stressed that he didn’t have control of the board.
Antioco is betting the house on a controversial no-late-fee policy and on migrating customers online. While lower fees and higher costs continue to pinch, the company’s financial position has improved.
Icahn was similarly stymied when his investment in Time Warner and a hard-hitting six-month campaign against management failed to budge TW shares.
He had initially contemplated running a full slate of directors to throw at Time Warner’s old board. With little support on Wall Street, Icahn toyed with running a partial slate, then dropped the proxy fight altogether.
But Icahn, with a net worth of $8.7 billion (ranked No. 53 on the list of the world’s richest people), rattles corporate cages for love, not money. And he generally walks away unabashed.
He’s recently been playing hardball with South Korean tobacco giant KT&G. He won a seat on the board last month and is leaning on management to break up the company.