Newspaper article THE JOURNAL RECORD

Icahn on Takeovers: / Corporate Raider Recommends Changes to Put Him, Comrades `out of Business'

Newspaper article THE JOURNAL RECORD

Icahn on Takeovers: / Corporate Raider Recommends Changes to Put Him, Comrades `out of Business'

Article excerpt

NEW YORK (UPI) - Heads of American companies indulge themselves in luxuries at shareholder expense while their factories fall down, assured most shareholders will not object, corporate raider Carl Icahn said Wednesday.

In remarks to a gathering of business and economic writers, Icahn recommended changes in securities law he said would put him ""out of business'' yet would benefit society as a whole.

Mainly he recommended the creation of outside managers in the form of ""equity funds'' acting as as middlemen between stockholders and companies.

Icahn's comments about shareholder apathy in large part echoed the observations of Securities and Exchange Commission Chairman John S.R. Shad made earlier before the same group, the Society of American Business and Economic Writers.

The dramatic battles of takeover artists to capture companies they think can be broken up and resold at a profit or else result in handsome payoffsby managements to give up their efforts are one ofthe most conspicuous business developments of the mid 1980s. Congress and regulating agencies are watching closely, trying to decide if the government should intervene.

From Icahn's perspective, the most striking aspect of takeover battles is how shareholders go along with management even though the stock markets would pay more for their companies with the management replaced.

""It's amazing,'' Icahn said. ""I don't think the shareholders really understand what it's all about. They're giving up their rights for no reason.''

Shad, in his remarks, also focused on how shareholders are ""disenfranchising themselves.''

A takeover artist like Icahn will bid for the stock only to have shareholders approve the management's defensive reaction, often diluting the stock so shareholders end up with less influence on management.

""They just automatically check the square,'' Shad said. ""They have an automatic affirmative toward recommendations by management.''

In addition, studies indicate only 5 percent of the shareholders read their proxy statements, Shad said. …

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