Billionaire Carl Icahn Increases Exposure to AIG, Xerox; Dumps Gannett, Hologic

Feared activist Carl Icahn of Icahn Capital LP reduced his fund’s exposure to U.S. equities during the first quarter of 2016, jettisoning six positions, including the stake in Apple Inc. (NASDAQ:AAPL). Although the billionaire investor did not channel capital into new positions during the March quarter, he did report a new position in Manitowoc Foodservice Inc. (NYSE:MFS), which resulted from the separation of Manitowoc Company Inc. (NYSE:MTW)’s Crane and Foodservice businesses. Mr. Icahn has voiced his pessimistic views on financial markets since last year, blaming the near-zero interest rate monetary policy pursued by the Fed for the abnormal behavior on the part of investors and companies. The equity portfolio managed by Carl Icahn was valued at $21.49 billion at the end of March, a massive decreased from the $29.44 billion-portfolio recorded at the end of the fourth quarter. Having this in mind, let’s proceed to the discussion of Mr. Icahn’s major moves implemented during the first three months of 2016 in addition to dumping the stake in Apple, which wasn’t taken as a surprise, since Icahn himself revealed the move before filing the 13F.

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Icahn Increases Exposure to American International Group Inc. (NYSE:AIG)

– Number of shares owned by Carl Icahn as of March 31: 44.42 Million

– Value of Carl Icahn’s holding as of March 31: $2.40 Billion

Billionaire Carl Icahn boosted his firm’s exposure to American International Group Inc. (NYSE:AIG) by 2.18 million shares or approximately 5% during the March quarter to 44.42 million shares. The upped stake was valued at $2.40 billion at the end of the March quarter and accounted for 11.2% of the fund’s equity portfolio, second only to Mr. Icahn’s $7.42 billion-position in his holding company Icahn Enterprises LP (NYSE:IEP). The activist investor previously urged the insurer to split into three separate companies that would focus on life, property-casualty and mortgage coverage insurance. Earlier this year, AIG agreed to provide two board seats to Carl Icahn and John Paulson of Paulson & Co., so Mr. Paulson and Samuel Merksamer, managing director of Icahn Capital LP, joined the 16-member Board. Both Mrs. Icahn and Paulson previously suggested that the so-called de-conglomeration plan would allow the insurer to avoid the government’s Systemically Important Financial Institution (SIFI) designation. AIG shares are down 10% year-to-date. Paulson & Co. owns 11.23 million shares of American International Group Inc. (NYSE:AIG) as of March 31.

Icahn Boosts Stake in Xerox Corp (NYSE:XRX) Ahead of Separation

– Number of shares owned by Carl Icahn as of March 31: 92.38 Million

– Value of Carl Icahn’s holding as of March 31: $1.03 Billion

The feared activist investor increased his position in Xerox Corp (NYSE:XRX) by 5.94 million shares or roughly 6% during the January-to-March period, ending the first quarter with 92.38 million shares. The reshuffled stake was worth $1.03 billion on March 31 and made up 4.8% of Mr. Icahn’s equity portfolio. Earlier this year, Xerox announced plans to separate its Business Process Outsourcing (BPO) business from the Document Technology and Document Outsourcing business by spinning-off the former. More importantly, Xerox’s management and Carl Icahn reached an agreement stipulating that three Icahn-designated directors will serve on the nine-member Board of the BPO company. Mr. Icahn saluted the company’s split decision by saying “I applaud and respect Ursula Burns [the CEO of Xerox] for doing what she believes shareholders want”. The share price of Xerox’s stock has declined 14% since the beginning of 2016. Joel Greenblatt’s Gotham Asset Management acquired a new stake of 3.96 million shares of Xerox Corp (NYSE:XRX) during the March quarter.

Carl Icahn Cuts Nuance Communications Inc. (NASDAQ:NUAN) Stake in Half

– Number of shares owned by Carl Icahn as of March 31: 30.07 Million

– Value of Carl Icahn’s holding as of March 31: $561.99 Million

Carl Icahn and his team cut the stake in Nuance Communications Inc. (NASDAQ:NUAN) by a massive 30.72 million shares during the first quarter of 2016, which represents a reduction of 50% quarter-on-quarter. The remaining 30.07 million-share stake was valued at $561.99 million on March 31. A total of 26.32 million shares of the discarded block were sold to the provider of voice recognition solutions under a stock purchase agreement reached in early March. The shares were sold at a price of $19.00 per unit. Nuance funded the transaction with a mix of $375 million cash on hand and a 90-day promissory note with a face value of $125 million. Earlier this month, analysts at Leerink reduced the price target on Nuance Communications to $22 from $23 and reiterated the ‘Outperform’ rating, citing revenue miss for the second quarter of fiscal 2016 that ended March 31 due to revenue erosion and revenue model transition issues. Nuance’s shares are 17% in the red year-to-date. Jim Simons’ Renaissance Technologies LLC has 3.18 million shares of Nuance Communications Inc. (NASDAQ:NUAN) in its equity portfolio as of March 31.

Icahn Sold Out Entire Gannett Co Inc. (NYSE:GCI) Position

– Number of shares owned by Carl Icahn as of March 31: 0

– Value of Carl Icahn’s holding as of March 31: 0

Carl Icahn sold out his entire 6.50 million-share position in Gannett Co Inc. (NYSE:GCI) during the March quarter. The multi-platform news and information company has seen its market drop nearly 2% since the beginning of 2016. Gannett, the publisher of USA TODAY, recently approached Tribune Publishing Co (NYSE:TPUB), the owner of the Los Angeles Times and Chicago Tribune, with an unsolicited offer of $12.25 per share, but the target rejected the offer. However, Gannett is not giving up just yet, as the international news and information company boosted its offer to $15.00 per share, which values Tribune at approximately $475 million. The bidder’s operations include 112 daily publications and related digital platforms in the United States and the United Kingdom, as well as more than 400 non-daily local publications in the U.S. and more than 150 such publications in the U.K. Howard Guberman’s Gruss Asset Management added a 653,000-share position in Gannett Co Inc. (NYSE:GCI) to its pool of holdings during the first quarter of 2016.

Icahn Exits Successful Activist Campaign on Hologic Inc. (NASDAQ:HOLX)

– Number of shares owned by Carl Icahn as of March 31: 0

– Value of Carl Icahn’s holding as of March 31: 0

The billionaire investor also jettisoned his 28.15 million-share position in Hologic Inc. (NASDAQ:HOLX) during the first three months of 2016. Mr. Icahn disclosed a double-digit equity stake in the medical product company in late 2013 and then landed two seats on the company’s Board of Directors. The activist investor also maneuvered the appointment of Stephen P. MacMillan as Chief Executive Officer in December of 2013 to replace former CEO, Jack W. Cumming. Earlier this year, the activist investor said that his investment in Hologic serves as “the quintessential example of activism at its best”, thanking Mr. MacMillan for “a job well done”. Although the medical-equipment maker continues to grow at a solid pace, the management’s revenue guidance for the third quarter of fiscal 2016 didn’t seem to please investors. Hologic shares are down 11% year-to-date. Israel Englander’s Millennium Management reported ownership of 3.20 million shares of Hologic Inc. (NASDAQ:HOLX) through the latest round of 13Fs.

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