>>> Barron's Summary: Positive on RL, AIG, KALU, SNDK, CMP; Cautious on FB, CAT,

Barron's Summary: Positive on RL, AIG, KALU, SNDK, CMP; Cautious on FB, CAT, KMP

- Cover story: Cautious on KMP, KMR, KMI, EPB: The companies in the Kinder Morgan family of energy infrastructure companies offer a high-yielding way to participate in the booming U.S. energy infrastructure build-out, but shares are expensive based on conventional measures, and look unattractive compared with other big MLPs, with one issue of concern being the way distributions are calculated. 

- Tech Trader: Cautious on FB: Tiernan Ray questions the rationale behind the WhatsApp deal, noting that even if a way is found to transform the messaging app into a money-maker, the investment wont be paid back for some time; The darker possibility is that Facebook simply had to do this given its slow growth among the 18-24 age group, which appears to be the sweet spot for WhatsApp, making the move part of a growing trend in which the big players are buying traffic, buying activity, buying phenomena. 

- Trader: Its becoming more evident that 2014 seems to be taking on a complexion much different from the unbridled enthusiasm of 2013not necessarily bearish, but not particularly straight-up bullish either; Positive on RL: Clothing and accessory company doesnt seem popular on Wall Street despite solid financial results and popularity among consumers, shares are relatively inexpensive and make a good entry point for a long-term investor; Expiration of a Congressional tax break, known as bonus depreciation, last year means investors should probably look more closely at their stocks cash flows; CHK, PXD, and WQEP are among companies that could see a significant drop in cash-flow if bonus is not extended. 

- Features: Positive on AIG, DFS, HAL, IR: Investors who chase the biggest yields dont always come out ahead; these four companies have modest yields, but dividends could double within the next five years, and shares are relatively cheap. 

- Small Caps: Positive on KALU: Boom in commercial airline manufacturing is expected to continue for some time, a benefit to company that makes lightweight aluminum plate used in planes. 

- Follow-Up: Positive on SNDK: As more corporations turn to flash memory for high-end servers, company remains a major player, and shares remain cheap, trading at just 13 times earnings estimates for 2014; Positive on CMP: Firm that sells salt to municipalities has seen a boost this winter, and share price could rise as municipal stockpiles of salt run low. 

- Hedge Funds: Interview with Victor Khosla, Chief Investment Officer, Strategic Value Restructuring Fund, who says Europe is behind the U.S. in the distressed-debt cycle (picks: AAL, Edison Mission, Kloeckner Pentaplast, SolarWorld, Pfleiderer, McCarthy & Stone); Interview with Paul Walsh, meteorologist and analyst, The Weather Company, who says Weather is a significant driver of consumer behavior and therefore economic activity. 

- European Trader: Positive on Svenska Cellulosa Aktiebolaget: Despite recent earnings miss, companys move to a focus on hygiene products could pay off as trading normalizes with Russia and China, and shares could rise 20% in the next 12 months. 

- Asian Trader: Positive on BHP, RIO: Diversified mining giants have made progress since a drop in demand from emerging markets, and both stocks have room to run higher. 

- Emerging Markets: In emerging markets, economic growth, central bank policies, and structural reforms have gained more weight in determining currency performance so far in 2014. 

- Commodities: Time is running out for the chocolate industry to secure supplies of its most important ingredient, which means cocoa prices are poised to rise. 

- CEO Spotlight: Profile of CSX chief Michael Ward, who has focused on costs, safety, and efficiency, making the railroad a leader in the industry. 

- Streetwise: Cautious on CAT: Shares shouldnt really be rebounding, considering the fact that weakness in emerging markets and capital-spending cuts by minersthe two biggest factors in last years underperformancehave continued into 2014, though company does stand to benefit from growth in domestic non-residential construction.

FT : Telefónica deal faces antitrust hurdle

Telefónica deal faces antitrust hurdle

A logo sits illuminated by light outside the headquarters of Telefonica SA in Madrid, Spain©Bloomberg
Telefónica’s takeover bid to become Germany’s biggest mobile operator is hitting far-reaching antitrust objections from Brussels, raising the prospect of big asset sales that may undercut the sector’s newfound enthusiasm for consolidation.
The European Commission has told Telefónica to expect a formal complaint against its €8.6bn bid for E-Plus, KPN’s German mobile unit, by Tuesday, according to people familiar with the talks.

It will argue the deal could damage competition and would be likely to increase prices in retail and wholesale markets, with Telefónica dominating segments such as pre-pay mobile with almost a 60 per cent market share.
These tough conclusions presage a negotiation over potential remedies that will, as a minimum, touch on shedding valuable spectrum, which carries fast mobile services. To address the objections Telefónica would need to provide cut-price access to rivals that want to use their networks on a wholesale basis, according to people involved.
Brussels will serve its so-called “statement of objections” as industry executives gather in Barcelona for the Mobile World Congress, where the Telefónica deal will be closely watched as a transformative example for Europe’s fragmented mobile sector.
Europe’s telecoms business is entering its first major bout of consolidation since the privatisation of monopolies in the 1980s and 1990s, with groups in Italy, France and the UK openly discussed as possible targets.
But the in-country dealmaking hangs on how Brussels’ polices competition. Telefonica’s bid cuts the number of operators to three, a level of concentration that test the limits of Brussels merger control regime. A smaller 4-to-3 deal in Ireland – where Hutchison Whampoa is buying Telefónica’s business – is also facing EU objections.
Joaquín Almunia, the EU competition chief, has spoken out against national mergers that prompt “higher prices and less quality” and has urged executives to consider cross-border deals instead. But, last year, he cleared a 4-to-3 merger in Austria with two main conditions: that spectrum was set aside for a fourth entrant and a virtual operators came into the market.
While the severity of the requirements initially surprised the sector, no fourth network operator materialised and Austrian retail prices have increased significantly as virtual operators complete preparations to enter the market.
The Austria experience is weighing on the commission as it calibrates its response to Telefonica’s move, which causes more significant competition problems in Europe’s main retail market. Prices in Germany are already much higher than in Austria and the post-merger group would be a market leader.
Industry executives argue the consolidation is vital to steady declining revenues and drive investment. Some fear a regulatory barrier to in-country consolidation will leave them as easy prey for overseas groups, such as AT&T of the US.
Statements of objections are not uncommon in antitrust reviews. Telefónica will be given the opportunity to challenge the findings and hold a hearing. The Commission currently has a May 14 deadline to decide on the merger.

FT : Austrian takeover is a touchstone for telecoms dealmakers

Austrian takeover is a touchstone for telecoms dealmakers

Once the merger was crowned and three operators were left standing, it took a matter of days for something rare and unusual to jolt Austria’s cut-throat mobile phone business: prices started to rise.
Through Bob, Hallo, Yesss! or Go! – some of Austria’s snappily named mobile brands and tariffs – consumers are now generally paying more, especially for no-frills packages.

“We warned that prices would rise,” says Theodor Thanner, Austria’s competition regulator who questioned the EU approving Hutchison’s takeover of Orange last year. “Our forecast has been fulfilled.”
European operators, whose top ranks flock to Barcelona this week for the Mobile World Congress, see the shift very differently. To Andreas Bierwirth, head of T-Mobile Austria, the modest rises were simply the end of “more or less a joint suicide pact”.
Facing a revenue slump and a looming bill for next generation network investment, Europe’s telecoms sector are looking to in-country consolidation for deliverance. If they succeed, Austria is a glimpse at things to come.
The Alpine country of 8m people is atypical and in some ways defies commercial logic: it has some of Europe’s lowest prices and smallest customer bases but operates one of its best networks using its most expensive spectrum.
Yet its experience of 4-to-3 consolidation – the consequences of which are contested and still unfolding – is becoming the touchstone for Europe’s telecoms dealmakers and the competition authorities keeping their pent-up energies in check.
As Telefónica this week receives formal antitrust objections for its €8.6bn takeover bid for KPN’s German mobile unit E-Plus, Austria is both a guide to the coming negotiation – and a potentially discomfiting case study for the European Commission, the EU’s competition watchdog.
The sector is never shy of confronting its regulators, nor short of demands. When preparing for the Barcelona conference this year, industry chief executives agreed a five-point plan to present to Brussels.
Only the agenda – agreed at a meeting with the region’s top executives earlier this month – quickly became seven points. And even those gave only an outline of the arguments that executives hope will finally bring growth back to the sector.
But the executives know this year may be remembered as a turning point for just one decision – and there is no certainty it will go their way. A lot is riding on Joaquín Almunia, the EU’s competition chief.
Investors are piling back into telecoms stocks – driving them up 40 per cent since the summer – anticipating a shake-up leaving fewer operators with higher prices and better margins. A wave of deals in countries from Italy to Poland has been rumoured if the German deal goes ahead.
Mr Almunia, however, may be following a different script . He has repeatedly warned the industry not to expect a “blank cheque to consolidate” within national borders and raise prices “on the mere promise of more investment”.

His Austrian merger decision was initially met with alarm by the industry, who saw the conditions as onerous and harsh. Since then though prices rose about 10 per cent in 2012, with Telekom Austria going much further on some tariffs. It is exactly what Brussels wanted to avoid.
The cause will matter, especially if the increases continue. Should Mr Almunia conclude his “remedies” were too lax, it is a bad omen for Telefónica, whose German takeover bid poses even bigger competition problems.
Operators in Austria blame many factors for the modest increases: tidying up tariffs, falling roaming revenues, and the €2bn recently paid to the Austrian treasury for spectrum. Jan Trionow, head of Hutchison’s Austrian unit, called it “the most ridiculous auction in Europe”. “Consumers are not paying the price of low competition but of taxation on mobile broadband.”
Georg Serentschy, who recently stepped down as telecoms regulator, rejected the claims as “pure PR” that has “nothing to do with the truth”. “The objective of the price rises was clear enough – raising margins. Fine. Just don’t blame the auction.”
The other factor is that the merger – as it stands – went ahead without conditions. Mr Almunia forced Hutchinson to set aside spectrum to enable the entry of a fourth player – but there was no interest. “Nobody is stupid enough to step into an already ruined market,” says Hannes Ametsreiter, chief executive of Telekom Austria. “If [Orange] are close to bankruptcy, why should the others come in?”
The second requirement was providing access for mobile virtual network operators (MVNOs), who were not present in the Austrian market. While a handful are entering the market, the first will only be operating from the end of this year. Mr Serentschy reckons the “bold move” on prices was partly down to operators realising “it is their last chance before the MVNOs come in”.
Critics are calling on Mr Almunia to take a tougher line on Germany. Antonios Drossos of Rewheel, a Helsinki based consultancy, says the “toothless” Austria conditions must be strengthened by requiring the “actual entry” of a fourth network operator in Germany.
It poses a dilemma for Brussels: requiring an upfront buyer, or offering a package of assets to attract a new entrant may be too much for Telefónica to swallow. “Depending on the severity of any remedies the difference for the retail market between a block and a conditional approval might not be that great,” says one analyst.
The industry, meanwhile, want the fixation with consumer prices to end. “They need to decide what is best for Europe,” says Mr Ametsreiter. “Is it the cheapest prices where some players can’t survive, or is it the best infrastructure?”

>>> KPN chairman unsure over future as independent telco, Base will not be sold

KPN chairman unsure over future as independent telco, Base will not be sold

The Dutch telco KPN’s future as an independent telco is uncertain, Dutch daily NRC Handelsblad wrote, citing KPN's Chairman Eelco Blok who said this in an interview with the paper.

He said in five years’ time, the European telecom market will be different from today and does not know if KPN will be an independent part of that market then.

The report noted European telecom companies are relatively cheap targets for large foreign parties such as America Movil. Also parties like Telefonica, Vodafone and Liberty Global are looking for acquisitions in Europe.

As America Movil canceled its offer for KPN in October 2013, the company is allowed to make a new offer as from April. Blok, however, said he does not expect America Movil will have another go at KPN now, as it has reduced its holding in KPN from 29.8% to 27.1%, recently. There is also no indication of an offer by another party, the report noted.

KPN will hold on to its Belgian Base mobile phone operator, that was up for sale earlier, the report added.


Source NRC Handelsblad

(BFW) George Soros Plans to Invest in European Banks, Spiegel Says

George Soros Plans to Invest in European Banks, Spiegel Says
2014-02-23 12:51:55.946 GMT


By Sheenagh Matthews
     Feb. 23 (Bloomberg) -- “I believe in the Euro,” U.S.
investor George Soros says in interview with Spiegel magazine.
  * “My investment team is pleased to soon be earning lots of
    money in Europe”
  * Will be “pumping money into banks that urgently need
    capital”
  * Looking into investments in Greece as its economy improves
  * Angela Merkel aggravated Euro crisis with unnecessary
    austerity
  * Euro area at risk of Japan-style economic stagnation


For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

--Editors: Amy Teibel, Robert Lakin

To contact the reporter on this story:
Sheenagh Matthews in Frankfurt at +49-69-92041-217 or
smatthews6@bloomberg.net

To contact the editor responsible for this story:
Simon Thiel at +44-20-7673-2814 or
sthiel1@bloomberg.net

(Barron's) After Forest Deal, Actavis Could Climb 50%

After Forest Deal, Actavis Could Climb 50%

Investors are cheering the $25 billion deal, which should boost Actavis' earnings dramatically.temn

Generic drug giant Actavis is once again making a purchase that could make the generic drug maker bigger and better.

Early Friday, Actavis (ticker: ACT) announced that it would pay $25 billion in cash and stock to buy specialty drug maker Forest Laboratories (FRX) in a deal that is expected to create a company with $15 billion in annual sales and generate double-digit accretion to Actavis's bottom line.

Investors were not shy about showing their approval. Forest's share price rose 29% to $92.33, well above the $89.48 per share Actavis is offering. And Actavis jumped 6.9% to $205, after earlier climbing as much as 14% to a new 52-week high of $219.

That's an unusual move. Historically, companies making big purchases can suffer a drop in their share price as investors worry about debt, dilution and how the newly acquired assets will fit into the bigger picture. But in the past year or so, acquirers have often seen their share price rise, perhaps because in an era of cheap money and slow organic growth, investors think acquisitions make sense.

This is not the first deal for Actavis. The stock has soared in the past year amid an industry-wide flood of deal making as generic and specialty drug makers look to fuel future growth by making acquisitions that add new drugs, expand their footprint into new markets and allow them to take advantage of lower-corporate tax rates offered by some foreign countries.

And at less than 13 times estimated 2015 earnings, the stock can still climb as Actavis's bottom line expands drastically over the next few years.

"It is a strategic deal," says Randall Stanicky, an analyst with RBC Capital Markets. "Yes, it is being made more attractive by the tax rate angle. But it is still a very strategic deal."

One of the big winners is Carl Icahn. Since November 2009, when the activist investor took a stake in Forest, the stock has almost tripled in value.

Forest has been seen as a takeout target for the past few years amid a wave of consolidation in the specialty drug industry. Last year, nine drug makers spent more than $38 billion on mergers and acquisitions. Among them was Actavis, which paid $8.5 billion in stock to buy branded drug maker Warner Chilcott.

Until that point, Actavis, which was known as Watson Pharmaceuticals until it took the name of the Swiss drug maker it purchased in 2012, had largely relied on sales of generic drugs. Buying Warner Chilcot not only added higher-margin branded drugs to Actavis's portfolio, it also allowed Actavis to relocate its headquarters to Dublin and cut its U.S. corporate tax rate by almost one-third.

That more attractive tax rate, when applied to Forest, means Actavis can "realize $100 million in synergies right out of the box," says RBC's Stanicky. But the company expects tax and operating synergies to total $1 billion in addition to the $500 million in cost cuts Forest previously targeted for 2016.

As a result of the takeover, Actavis will get its hands on Forest's portfolio of branded drugs, including medications for cystic fibrosis, depression and hypertension. What's more, the scale of the combined company will put it in a better position to deal with the changing health-care landscape in the U.S.

So what's the bottom line? If the deal produces the double-digit accretion targeted by Actavis, the company could earn $16 a share or better next year, compared with earlier estimates of $14.52 for 2014. RBC's Stanicky says that could jump to $20 a share by 2017, if not sooner. Apply that earnings forecast to a 15 multiple – where Actavis was trading last week – and that implies a price of $300 a share.

To be sure, there are risks ahead for investors. A bidding war could emerge for Forest if another drug maker decides it wants the company. Also, the larger Actiavis gets, the harder it becomes to generate the robust revenue and earnings growth craved by investors.

But analysts see more deal making ahead for Actavis, and the broader specialty drug industry, citing the cheap cost of borrowing and the industry's fragmented nature.

So even after the stock's big gains, this drug maker may be just what the doctored ordered.

>>> "Money Launderer Until Proven Innocent" - Italy Imposes 20% Tax Withholding On All Inbound Money Transfers



"Money Launderer Until Proven Innocent" - Italy Imposes 20% Tax Withholding On All Inbound Money Transfers

While the propaganda surrounding Europe's "recovery" has reached deafening levels, what is going on behind the scenes is quite the opposite, and in the latest example that Europe is increasingly formalizing a regime of implicit capital controls, we learn that Italy has just ordered banks to withhold a 20% tax on all inbound wire transfers: a decree which on to of everything will apply retroactively to February 1. As Il Sole reports, "the deductions will be automatic (unless prior request for exclusion), and then it will be up to the taxpayer to prove that the money is not in the nature of compensation "income." In other words, as of this moment, but really starting two weeks ago, all Italians are money launderers unless proven innocent.

Some more details on Italy's latest decision to limit capital flows into the country, Google translated:

... the collection is the result of the decision to consider any transfer from abroad and directed to an individual Italian, as a component of taxable income, subject to proof to the contrary, which must be date the taxpayer receives the sum on your account. However, the first payments to the Treasury by intermediaries (mainly banks) will be performed July 16, so that the deemed payment accrued from February 1 until June 30 (and therefore set aside and with interest). Next, you will pay the withholding every 16th of the month following the effective perception of the sum. In fact, all taxpayers who receive a transfer from abroad on their personal account - and not professional or business - will be applied to the deduction, as an advance which will then be computed in the annual tax return.
What Italy appears to be focusing on are direct income payments where individuals get compensation via bank transfer. Of course, since the tax is superceding, good luck to any Italian citizen explaining the origin of every inbound money transfer and it is in accordance with the law. `

It is, therefore, a real "held" that will not be applied only in the case where the taxpayer proves that the amount received or quenched and does not have a connotation income but only and exclusively sheet: for example, the transfer incoming could be a return of a loan made in the past, or the return of a deposit, the date for the conduct of a house leased abroad.
Reasoning aside, what Italy just did is enforce a "shotgun" withholding tax on all inbound money:

The mechanism that provides a primary role to the bank official that is to receive the declaration of the taxpayer and evaluate it. In any case, you make the deduction or not, the name of the recipient will be reported by the bank Revenue Agency. And the taxpayer has until February 28 of the year following the year of the deduction to attest to the improper application of withholding tax to the bank and ask for a refund.
Even Il Sole admits that the new tax is so ad hoc that confusion will surely follow:

As is apparent from the wording of the measure, there is not even a standard for the development of self but, certainly, there will be a "balancing" between assets and funds held abroad (the RW of the UNICO) and income flows in entry: in short, it is likely that the intermediary in addition to the self-certification may require a taxable person to the performance of the RW framework from which we must infer what good has originated the incoming cash flow.
Of course, what will end up happening, is that more Italians- especially the wealthiest ones - will open bank accounts either in other Eurozone nations that have not established such a draconian wire transfer regime, or - more realistically - in such New Normal tax havens as Singapore now that Switzerland's main business model for centuries has been destroyed. The end result will be even less capital inflows into Italy - just the opposite of what the desperate Italian government is trying to achieve. But that is a concern for the next Italian government and the one promptly replacing it. For the time being, let's all pretend Europe is fixed, even as it prepares for the nuclear option: the confiscation of retirement savings.

Bye Bye, WhatsApp: Germans Switch To Threema For Privacy Reasons

Bye Bye, WhatsApp: Germans Switch To Threema For Privacy Reasons


Swiss startup Threema probably didn't expect this. In 24 hours, the startup hasdoubled its user base, according toS?ddeutsche. It is now sitting at the top of the paid App Store chart in Germany. Interestingly, Threema's key feature is its true end-to-end encryption - German users probably don't want to use a Facebook-owned app anymore.

"Unlike other popular messaging apps (including those claiming to use encryption), even we as the server operator have absolutely no way to read your messages," the website says.

While WhatsApp promises a great level of security, the startup faced security holes acquisition. Facebook is an advertising-based company, after all.

Facebook promised that WhatsApp wouldn't change. It would remain an independent entity without an advertising-based business model. But apparently, these promises are not enough for German users.

WhatsApp currently has around 30 million users in Germany. It's the indisputable leader. That's why it's interesting to see that a massive user base is ready to jump ship and switch to a brand-new service.

Threema only has three employees and has been overwhelmed by support requests. The app looks and acts a lot like WhatsApp, except that the startup's server admins can't even see the messages because they don't have the encryption keys.

Thilo Weichert, data protection commissioner for the German Land of Schleswig-Holstein, said that the WhatsApp acquisition could create data-protection issues. "Facebook sees everything. And WhatsApp also sees everything," he said to SHZ. According to Weichert, you should be careful with the services you are using. And he's not the only one who thinks that - among the 200,000 new Threema users who paid $1.99, 80 percent of those live in Germany.

As a reminder, Angela Merkel's phone has been tapped for years by the U.S. intelligence agencies. It's a very pragmatic example of a privacy breach. It probably resonated with Germans. Now, WhatsApp will have to make sure that its users still feel safe sending WhatsApp messages. It will have to prove that privacy is still one of the company's top priorities, Facebook or not.

>>> Cyprus junior coalition party Diko withdraws support for the govt; May jeopardize Cyprus pledge to international creditors

Cyprus junior coalition party Diko withdraws support for the govt; May jeopardize Cyprus pledge to international creditors - financial press - Disy party pres Anastasiades to remain in power but will no longer have a parliamentary majority, which could complicate unpopular privatization measures agreed upon with foreign lenders nearly a year ago.

FT : Carl Icahn, obsessive activist investor

Carl Icahn, obsessive activist investor

His decades-long war on corporate complacency has gone mainstream, writes Stephen Foley

Steven Goldstone, when he was chief executive of RJR Nabisco, used to call the appearance of Carl Icahn “a rite of spring”. Year after year, the investor would show up to demand RJR split its snacks and tobacco businesses apart; year after year, he would fight to persuade fellow shareholders to approve his representatives for the board; and year after year his defeat would not deter him from trying again.
The remarkable persistence of Mr Icahn has been on show again this week. Partly because his four-year campaign of pressure on the drugmaker Forest Laboratories came to lucrative fruition in a $25bn sale to Actavis.

Mainly, however, because the Forest deal, coming two days after he turned 78, provided another opportunity for Mr Icahn to argue that activist investors are shareholders’ best defence against an entrenched corporate management class that is self-serving and feckless. It is an argument he has been making consistently since the 1980s, when he was one of America’s most notorious corporate raiders and an inspiration for Gordon Gekko, the fictional financier created by film-maker Oliver Stone, whose motto was “greed is good”.
The difference is that today mainstream investors are more attentive to activists’ arguments. “Shareholders should be tickled to death when he shows up,” says T Boone Pickens, another veteran corporate raider and a friend of Mr Icahn. “He’s about as smooth as a stucco bathtub, he doesn’t pull any punches, but he is accurate about the analysis. You can judge a trapper by his pelts, and Carl’s got a lot of pelts.”
Mr Icahn had twice launched proxy fights for board seats at Forest since starting to build his 11.4 per cent stake and declaring that he had found another great company brought low by mismanagement.
It began as a personal battle: he made insinuations of nepotism against Howard Solomon, then chief executive; Mr Solomon denied the claims and accused Mr Icahn of “maximum distortion”. It became more co-operative when Mr Icahn’s representatives had made it on to the board. He said on Tuesday that the takeover, at a 25 per cent premium to the prevailing share price, was “a terrific result” for all shareholders. It is also good for Mr Icahn, who makes a $1.7bn profit on its investment. He made a 31 per cent return in his funds last year, and 2014 is also off to a good start.
Carl Celian Icahn was brought up in a hardscrabble neighbourhood of Queens, New York, the son of a singer and a teacher. A self-confessed “obsessive”, he drove himself hard enough to earn a place at Princeton studying philosophy, and eventually rebelled against his parents’ wish that he become a doctor. He went into stockbroking, striking out on his own as a trader in 1968. He no longer manages money for anyone else but his $20bn fortune gives him more firepower than most activists.
Shareholders are keener than ever to hear what activists have to say. So Mr Icahn has taken to handing out “myth-busting” facts and figures about the value of activist investors’ interventions, particularly his own. Investors who buy into a company when an Icahn representative goes on the board have on average outperformed the S&P 500 by 10 percentage points, he says.
None of which means he attracts fewer charges of being a bully. That was one of the insults that flew in a heated exchange on CNBC last year, when Mr Icahn took rival investor Bill Ackman to task for his bearish view of Herbalife, a nutritional supplements company in which the pair had taken opposing positions, calling him a “crybaby” and worse.
After the Forest deal, Mr Icahn penned yet another defence of activism. “The relentless insistence that shareholder activism is detrimental, notwithstanding the mountain of evidence proving that the opposite is true,” he wrote, in a note that he decided not to publish but passed to the Financial Times, “reminds me of those last few eminent doctors in the 19th century who continued to extol the virtues of bloodletting as a method of curing illnesses, despite the crushing amount of data proving that this treatment was killing patients.”
“I just sit down with a martini and I write,” he said of his caustic open letters to management.
Unlike many in finance, Mr Icahn starts his day late, rarely appearing in the office before 10am. He stays awake into the small hours, reading, doing puzzles and practising chess, while no one else is awake to interrupt him with calls.
Brett, 34, one of two children with his first wife (he later married his personal assistant), plays an increasingly important part in the business, taking the lead on his father’s $4bn Apple investment. But there is no doubt who calls the shots.
The Icahn offices, overlooking New York’s Central Park, are decorated with the relics of battles past, including deal trophies and framed letters of support.
Today’s battles are fought digitally, and Mr Icahn has learnt to wield the power of social media in support of his campaigns. A tweet from @Carl_C_Icahn can light a fire under a share price. Last August, he sent shares in Apple up 5 per cent with 140 characters: “We currently have a large position in APPLE. We believe the company to be extremely undervalued. Spoke to Tim Cook today. More to come.” That kicked off another running battle, this time to persuade the iPhone maker to return almost all its $160bn cash pile to shareholders. He failed to win support from shareholders, even for a more modest proposal for a $50bn return, but Apple has increased its share buybacks so much that he was able to retreat and declare victory at the same time.
But what is the difference between victory and defeat anyway? At RJR Nabisco, Mr Goldstone split the businesses in his own time and in his own way, but the position remains one of Mr Icahn’s most lucrative. The fact that investor activism has gone mainstream is the biggest victory of all.