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NEW YORK - Billionaire investor Carl Icahn has taken a 1.4 per cent stake in Motorola, news that pushed the cellphone maker's shares up more than 6 per cent.
Motorola said on Tuesday that Icahn was known for pressuring management to improve performance in companies in which he held shares. His presence on Motorola's board could prompt more aggressive measures from the No. 2 mobile phone maker to contend with flagging profits and operating margins, analysts said.
"A lot of people believe Motorola has a lot of value that could be unlocked," said Piper Jaffray analyst Michael Walkley.
Motorola said it received a notice of nomination from Icahn entities owning about 33.529 million shares of the company's outstanding stock.
The company said it had no additional information on Icahn's intentions. Motorola has not set a date for this year's shareholders meeting.
Pressure on Motorola chief executive Ed Zander has grown as the company reported earlier this month a sharp drop in profit due to price cuts for its flagship Razr phone and tough competition in emerging markets.
Motorola said it plans to cut 3500 jobs in a bid to restore operating margins to double-digit percentage levels. But investors are looking for the company to produce a revenue-boosting successor to the Razr and fend off its larger rival, Nokia.
Motorola shares have slipped 26 per cent from their most recent high of US$26.30 ($38.34) in mid-October, just before it reported third-quarter revenue that missed Wall Street forecasts. That compares with a 4.5 per cent rise on the Standard & Poor's 500 Index in the same period.
The Icahn news was likely to boost Motorola shares in the near-term, analysts said.
- REUTERS
