Buffett vs Icahn rematch: Is history on Icahn's side?

If Warren Buffett is the finance world's lovable grandfather, the relative everyone wants to see at Christmas, then Carl Icahn may be the uninvited uncle who crashes Thanksgiving dinner.

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Buffett is widely seen as a corporation’s friend. When he invests, it's like the Good Housekeeping Seal of approval. When Icahn starts buying a company’s stock, insiders see it as time to close the windows, lock the doors and hide the kids.

Icahn wasn’t the first corporate raider, but he may go down in history as the most active.

TickerSecurityLastChangeChange %
OXYOCCIDENTAL PETROLEUM CORPORATION38.95+1.19+3.15%

While Icahn and his ilk prefer the term “activist investor,” the reality is his moves on companies are rarely welcomed. His latest is a fierce fight against Occidental Petroleum Corp’s board over its $38 billion purchase of Anadarko Petroleum. Icahn has criticized the deal, calling it “hugely overpriced.”

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Buffett’s Berkshire Hathaway financed the acquisition with $10 billion, but what has pitted billionaire against billionaire is that the deal gave Buffett 100,000 shares of cumulative perpetual preferred stock with a value of $100,000 per share.

This isn't the first time, the two financial titans have crossed swords. In 2014, Icahn authored a piece in Barron’s knocking Buffett for his passive investment in Coca-Cola. Icahn took issue with Buffett's abstention from a vote on the soda company’s compensation plan. "If a man of Buffett’s standing couldn’t take a stand, how can we expect other board members in this country to voice their opinions, especially if they are opposed to the CEO’s interest?” Icahn asked.

TickerSecurityLastChangeChange %
BRK.ABERKSHIRE HATHAWAY INC.329,405.00+103.00+0.03%
KOCOCA-COLA COMPANY52.67+0.04+0.08%

In his latest letter on Occidental, Icahn claims the company has lost $21 billion in market value on the deal – hence his proxy fight to replace members of the board.

It's a familiar tactic from the Icahn playbook. Here’s a look at how his game plans have worked out in the past.

  • Trans World Airlines – In 1985, Icahn bought the once-mighty airline, which was reeling from deregulation, and became its chairman. Three years later, he took the company private amid bitter fights with many of its unions, a move that raised TWA's debt to $4 billion. Routes, gates and planes were sold off, but bankruptcy was declared in 1992. Icahn stepped down as chairman in January 1993,  leaving with millions and a discount ticket arrangement he profited from afterward. Another bankruptcy and the tragic TWA Flight 800 crash from New York’s JFK in 1996 left the airline on shaky ground. American Airlines bought what was left in 2001.
  • Marvel Comics – In 1996, Icahn held hundreds of millions of outstanding bonds for the comic book company and was ready to don a cape to save the company from rival financial kingpin Ron Perlman. He was awarded control in court but only for a short term before executives from Marvel’s sister company, Toy Biz, mounted a charge to claim control of the company. One of those executives was Avi Arad, who became Marvel's real-life superhero, credited with pushing the company into the movie business and making it a multi-platform success story. Marvel was sold to Disney in 2009 for $4 billion.
TickerSecurityLastChangeChange %
DISWALT DISNEY COMPANY144.67-2.48-1.69%
  • Mylan Laboratories -- In 2004, the drug company announced an agreement to acquire King Pharmaceuticals. Icahn purchased a large block of stock and threatened a proxy fight over the deal; Mylan eventually gave it up.
TickerSecurityLastChangeChange %
MYLMYLAN NV17.70+0.44+2.55%
  • Motorola – In 2007, Icahn put pen to paper again, writing a letter to Motorola shareholders blasting the company’s board as “passive and reactive” as he waged another proxy fight. In addition to the usual request for board seats, Icahn also wanted to spin off Motorola’s mobile handset unit as a separate company. He won two seats and eventually, the handsets were spun off, but it started a game of hot potato with Motorola Mobility, which was bought by Google in 2012 for $12.5 billion. Two years later, Google sold the company to Chinese computer giant Lenovo.
  • Lionsgate – In 2010, with the Marvel sale the talk of Hollywood, Icahn targeted independent movie studio Lionsgate. Lawsuits and proxy fights ensued, with Icahn gobbling up 33 percent of the company. But the filmmaker led by longtime Hollywood veteran Jon Feltheimer fended him off. Icahn eventually claimed he had a “full slate” and that he had “determined it was a good time to exit.”
TickerSecurityLastChangeChange %
LGF.ALIONS GATE ENTERTAINMENT CORP.9.66+0.30+3.21%

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  • Apple – In August 2013, Icahn used Twitter to claim that Apple was “undervalued,” adding a short time later that he had spoken to Apple CEO Tim Cook. Apple’s market value jumped by about $17 billion on the tweets. Cook and Icahn, who wanted the company to buoy the price of its stock by more than doubling a share-buyback plan to $150 billion, had a dinner where they agreed to “continue dialogue.” Icahn later backed off from the high figure, and after a nearly three-year drama, sold his 52 million shares in 2016 for a $2 billion profit.
TickerSecurityLastChangeChange %
AAPLAPPLE INC.265.76+3.12+1.19%

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