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Carl Icahn may be ready to move on to his next target — even as news of his most recent shareholder victory over utility Dynegy and Blackstone’s Steve Schwarzman echoes around Wall Street.
The shareholder activist, in a barely noticed move, revealed last week he had taken a 1 percent stake in Cadence Design Systems, an electronic-design-automation business, while greatly increasing his stake in Mentor Graphics to a leading 11.8 percent position.
This has led to speculation that he plans to force a merger between the two integrated-circuit manufacturing rivals, an industry banker said.
In June 2008, Cadence made an unsuccessful hostile $1.6 billion offer for Mentor.
For now, though, Icahn can take a Dynegy victory lap. Yesterday, the Blackstone deal to buy Dynegy was scrapped, amid concerns that shareholders would vote against it. The utility is now seeking new bids and may sell assets, cut costs and restructure debt to continue as a standalone company.
Blackstone in August reached a $4.7 billion deal to buy Dynegy, and simultaneously reached a deal to sell Dynegy’s four natural-gas plants to NRG Energy for $1.36 billion.
Critics wondered why Dynegy would let Blackstone pay $540 million for the Dynegy shares (most of the purchase price was debt assumption), and collect $1.36 billion in the asset sale, when it could just sell the natural-gas plants themselves and take a $540 million dividend.
Icahn and hedge fund Seneca together soon accumulated almost a 20 percent Dynegy stake.
Seneca made the argument that Dynegy’s management team was conflicted because, under terms of the Blackstone purchase, they would be collecting roughly $38 million due to the change of control.
The activists won the ensuing p.r. war — beating Blackstone’s Schwarzman, and some of the most prized takeover defense bankers.
Icahn did not return calls seeking comment.
