Another day, another controversial deal for activist investor Carl Icahn.
The Wall Street Journal reported late Monday that Icahn could make as much as $400 million and possibly more betting against shopping malls. Facing slipping foot traffic as brick and mortar retailers continue to struggle amidst hundreds of store closings, some mall owners have run into challenges servicing their debt, sources told the Journal. Icahn, according to market traders, is "likely" the largest short seller of mall debt. (Short selling is a trading strategy that seeks to capitalize on an anticipated decline in the price of a security.)
It is unlikely that this move will endear Icahn to some investors -- as was the case last week when he bought a $1.2 billion stake in HP Inc and is pushing for the personal computer maker’s merger with printer maker Xerox, arguing that a union could yield big profits for investors.
“A combination is a no-brainer,” Icahn told the Journal. “There will probably be a choice between cash and stock, and I would much rather have the stock, assuming there’s a good management team.”
A merger would benefit investors in both companies by reducing costs as much as $2 billion and giving the combined firm a more balanced portfolio, the Journal reported. Icahn said he doesn't have a preference on how the deal is structured; some analysts have suggested a takeover of Xerox by HP would make more sense, given their respective sizes.
Xerox has a market value of $8.5 billion, while HP's is more than three times as much, at $29.6 billion.
Just days before he embarked on his hoped-for HP and Xerox union, he continued his fierce fight against Occidental Petroleum Corp’s board over its $38 billion purchase of Anadarko Petroleum. Icahn had criticized the deal, calling it “hugely overpriced.”
Warren Buffett’s Berkshire Hathaway financed the acquisition with $10 billion, and that pitted billionaire against billionaire because the deal gave Buffett 100,000 shares of cumulative perpetual preferred stock with a value of $100,000 per share, much to Ichan's chagrin.