Icahn asks Motorola shareholders for support; ClearBridge to support Icahn's bid for board seat

By Lisa Kerner

Charlotte, N.C., May 4 - Motorola Inc. investor Carl Icahn wants his fellow shareholders to ask themselves, "What is the real reason Motorola management is devoting so much time and effort to deny a large stockholder a single board seat, when their time could be much better spent fixing their business at this critical juncture for the company[?]"

In an open letter to shareholders released on Friday, Icahn pledged again, if elected to the Motorola board, to "devote all of the time and energy required to contribute to stockholder value."

"My $1.2 billion investment is evidence of my commitment to Motorola and its future success - to suggest otherwise is ludicrous. My interest in having things go right at Motorola is fully aligned with yours," Icahn's letter stated.

Equity manager ClearBridge Advisors, owned by Legg Mason, Inc., said it plans to support Icahn's election to Motorola's board at the annual meeting on May 7.

ClearBridge owned roughly 54 million shares of Motorola, valued at about $960 million, as of March 31, a company news release stated.

"We acknowledge and are deeply respectful of the quality of Motorola's board of directors," ClearBridge chief executive officer Brian S. Posner said in the release.

"However, given recent events at the company, we believe it is in the best interest of all shareholders to have a new representative on the board. We believe that Mr. Icahn will not only contribute positively to the dialogue among the members of the board, but he will offer valuable insights consistent with the interests of all shareholders."

ClearBridge's support comes a day after Motorola, also in an open letter, again urged stockholders to vote for the election of its directors. The company also fired back at remarks made by Icahn during a CNBC broadcast.

"Although we offered to work with Carl Icahn to identify two mutually acceptable, well qualified independent directors to add to your board - one immediately, and an additional candidate as soon as practicable - Carl Icahn has refused to cooperate," Motorola chairman and chief executive officer Edward J. Zander said in his letter.

Zander also questioned Icahn's willingness to "dump" some of his other board memberships so that he has "less than six" directorships.

Interview sparks war of words

On May 2, Carl Icahn and Motorola exchanged heated words in news releases over comments made by Icahn in a Nov. 1, 2006 interview replayed on CNBC.

In the interview, Icahn said, "How can a guy be on eight boards and know what the hell he's doing? These companies are complicated and you have tremendous competition from abroad. How can somebody sit on a board - even if he's the smartest guy in the world - if he was Einstein - and understand what that company is doing?"

While Icahn did not address the interview replay in his statement, he did find fault with Motorola's claim that since April 2003, the company has achieved 30% annualized returns. Icahn said that since Dec. 3, 2004 (the first trading day following the distribution of Freescale shares) Motorola has achieved negative 0.3% annualized returns.

"Motorola's destruction of $20 billion of market value over the last 6 months and its failure to create any improvement in share price over 2½ years is, in my opinion, completely unacceptable," Icahn's statement said.

On Feb. 28, Icahn announced plans to acquire between $119.7 million and $500 million of the Schaumburg, Ill., communications company's common stock.

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