Activist investor Carl Icahn has suggested to US handset maker Motorola Mobility that it sell its patent portfolio in order to realise its “significant value”. A filing with the SEC yesterday revealed that Icahn had discussed with Motorola Mobility…
Activist investor Carl Icahn has suggested to US handset maker Motorola Mobility that it sell its patent portfolio in order to realise its “significant value”.
A filing with the SEC yesterday revealed that Icahn had discussed with Motorola Mobility that it “should explore alternatives regarding its patent portfolio to enhance shareholder value”.
The statement said that Motorola Mobility’s patent portfolio was “substantially larger” than the portfolio of Canadian vendor Nortel Networks, which contained 6,000 patents and patent applications.
This portfolio was recently sold for US$4.5bn to a consortium of tech giants, including Apple, Ericsson and RIM.
The SEC filing said that Motorola Mobility’s portfolio contains many patents involving 4G technologies and that it had “significant value”, although no estimate was given.
“In addition, there may be multiple ways to realise such value given the current heightened market demand for intellectual property in the mobile telecommunications industry,” the statement read.
The statement was signed by Icahn Partners, three of Icahn Partners master funds, as well as its onshore and offshore entities. The document was also signed by Beckton Corp, Hopper Investments, Barberry Corp and High River Limited Partnership.
The statement said that the parties intend to have further discussions with Motorola Mobility on the subject.
In response, Motorola Mobility said that its board and management team continuously reviewed the company’s strategic direction and opportunities that it believes are in the best interests of the company.
It noted that the company had produced 22% revenue growth in its first quarter, and added: “Motorola Mobility has achieved these results, in part due to the fact that it has one of the strongest and most respected patent portfolios in the industry with over 17,000 patents and 7,500 pending.”
Speculation is mounting of more patent-centred acquisitions in the wake of the Nortel deal.
The US$4.5bn paid by the consortium for Nortel’s patent portfolio represented a five-fold increase on the US$ 900m stalking horse bid, which was made by Google.
There has also been recent speculation that Google is in talks to acquire InterDigital, the Pennsylvania-based wireless technology developer, which reportedly has approximately 8,800 patents.
Icahn Associates holds an 11.36% stake in Motorola Mobility. It also holds an 11.26% stake in Motorola Solutions, the other part of the vendor Motorola, which demerged in January.
Before the demerger, Icahn was a critic of the management of Motorola. His investment allowed him to have two board positions, which he used to pressure for a demerger of the company, which was completed in early 2011.
