Icahn gives up Apple buyback plan after ISS urges 'no' vote

Mon Feb 10, 2014 6:56pm EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Jennifer Ablan

(Reuters) - Billionaire activist investor Carl Icahn has backed off from his campaign urging Apple Inc to increase its stock buybacks, citing the company's recent repurchases as well as an influential proxy adviser's call against his proposal.

In a letter to Apple shareholders on Monday, Icahn wrote he was ditching his non-binding proposal to force Apple to add another $50 billion to its stock buyback plan, "especially when the company is already so close to fulfilling our requested repurchase target."

Apple shares closed up 1.8 percent higher at $528.99 on Monday.

For months Icahn had been asking Apple to boost its stock buyback program, proposing the iPhone maker repurchase another $50 billion. On Sunday, Institutional Shareholder Services Inc recommended shareholders vote against Icahn's nonbinding proposal, saying the motion would "micromanage" how the company uses capital.

Proxy advisory firm Egan-Jones has also recommended voting against Icahn's plan, which was up for a vote at Apple's February 28 shareholders meeting.

Apple Chief Executive Officer Tim Cook told The Wall Street Journal last week he wanted to be "aggressive" and "opportunistic" in buying back shares. He pointed out the company had repurchased $14 billion in stock in the two weeks since reporting financial results that disappointed Wall Street.

With the latest purchases, Cook recently said Apple had bought back more than $40 billion of its shares over the past 12 months. He said it was a record for any company over a similar span.

Icahn wrote in his open letter that Apple's recent share buybacks, amongst the largest in history, have been a bit like "bailing with a leaky bucket," given the scale of its cash reserves - though they were enough to placate him.   Continued...

 
The gold colored version of the new iPhone 5S is seen after Apple Inc's media event in Cupertino, California September 10, 2013. REUTERS/Stephen Lam