he owns just under 15% so he can't buy more until management removes the poison pill
he needs someone else to step up and start buying...right now, almost 30% of the shares are controlled by investors that would likely vote for any plan Icahn comes up with
management only owns 1% of the stock...so they are stuck...if they try to ignore Icahn, Icahn can even hire a bank to find buyers on his own
Icahn is giving the greenlight to buyers letting them know that even if they make a hostile bid for MENT, it will likely receive shareholder approval since so much of the stock is controlled by Icahn and other activists
if the market hadn't tanked for 2 days, MENT would be trading around 16.50 or higher
a lot of people are selling anything they can...also, with earnings tomorrow, a lot of people will wait until after earnings to buy...arbs don't want to get crushed on an earnings miss when they are only interested in the stock as a takeover target
i think MENT ends up getting bought for 18-19 in a strategic deal...this is not the type of company to be bought by PE
short term, I think the deal gets priced in and trades back up to 17 when earnings are done and current activist holders (other than Icahn, increase their stakes)
I might add that the strategic value of the assets MENT holds are of great value to different parties. CDNS is interested in the Calibre platform. That's a cash cow for MENT. PMTC can take the board design and benefit from MCAD/ECAD integrations. TMSC could also jump into the mix and benefit from a software play that it lacks.
All-in-all, MENT is sitting pretty good. It know it has the assets to maximize the shareholder value. In the process top mgmt will walk away with a nice nest egg.
The worst outcome here is for the employees. Uncertainty will force people to leave. But as an investor that's least of my concerns. I would just vote for the highest bidder without any sentimental attachment to what they intend to do with the company. Plain and simple...
The smart play is for CDNS to buy LAVA. It will cost them only a quarter as much, get them a DRC tool that is at least as good as Caliber (see http://www.deepchip.com/items/0486-08.html), shore-up their position in analog, save them the cost of laying off half of Mentor and Mentor will go away anyway thanks to Icahn.
(Plus it doesn't remind everyone of the 2008 fiasco)