Billionaire
investor Carl Icahn is known for his ability to yield a mighty pen in
his biting, vitriolic and oftentimes comedic letters to the boards and
management that he has mounted proxy fights against through the years.
So, what's the deal with the plain vanilla, boilerplate letter that he
sent to Steel Partners LLC's shareholders on Friday in an
attempt to inspire them to join his cause against the hedge fund that
has decided to go public in lieu of paying out redemptions to
investors?
Continue reading below
Steel Partners' plans to take its $1.2 billion Steel
Partners II flagship fund public via a reverse merger met strong
resistance from Icahn two weeks ago. Icahn, a limited partner in the
fund through ACF Industries LLC, a company he controls, filed suit
against the fellow New York activist hedge fund, accusing it of
committing fraud by not advising investors of its plans to go public.
Steel Partners in a bid to save it from paying out cash for
redemptions, said it will offer its investors shares in the public
entity, WebFinancial LP.
Icahn's open letter to Steel Partner investors reads as follows:
"As you know, Steel Partners has
announced the "WebFinancial Solution" which we believe would be
extremely detrimental to all of our investments in Steel Partners. I
am against that transaction and a lawsuit has been filed to oppose it
in Delaware.
I believe it will be beneficial for all investors in Steel Partners to
meet to discuss the "WebFinancial Solution." Because Steel Partners
has refused to make a list of investors available to us, we ask that
you call either Susan Gordon (212-702-4309) or Sue Zippo (212-702-4310)
at my office. Please provide them with your name and phone number. We
will then contact investors and arrange for a meeting. Steel Partners'
actions to date and plans for the future are significant events for all
of us and I strongly believe that we should meet to share our thoughts
and concerns."
Boring ... we expect this from some safe institutional investor that
walks the line of political correctness so as to not ruffle any
feathers, but not from the master feather ruffler Icahn.
The
language of the letter pales in comparison to the sardonic text of his
formal legal complaint against Steel, which was signed (and probably
penned) by Icahn's attorney Stephen Jenkins of Ashby & Geddes PA.
The complaint pokes fun at Steel Partners' Warren Lichtenstein's New
Year's Eve letter to investors detailing the go-public plans. "Part
marketing gibberish, and filled with what are apparently meant to be
motivational tidbits, Lichtenstein's New Year's Eve letter even quotes
a rhyme from Mary Kay Ash, the founder of Mary Kay cosmetics. ... But even
lipstick can't dress up Lichtenstein's ugly plan," the complaint said.
It
is hard to believe that Icahn did not ghostwrite this complaint and
slap his lawyer's John Hancock on it for legal purposes. And maybe his
lawyer penned that yawner of a letter to Steel's investors while Icahn
stamped his signature on the bottom. - Michael Rudnick
