Icahn mulls Netflix hostile takeover, slams board for ‘travesty’ in governance

Editor | 09-11-2012

Any doubt over the ambition of Carl Icahn following his investment in Netflix has gone after the VC legend has revealed he is mulling a hostile takeover of the OTT leader whose board he condemned for acting in a “reprehensible” manner.


The rebuke was Icahn’s reaction to Netflix’s management’s so-called “poison-pill” defence to a potential hostile bid by Icahn who only last week took a 10% stake in the company. Icahn has a reputation for shaking up management and forcing sales, using his board seat within companies as leverage.

After Icahn told the Reuters news agency that Netflix was undervalued and would make “a great acquisition for a number of companies”, the board announced a shareholder rights plan issuing one right for every share of common stock outstanding at the close of business on 2 November, which will trade with the company's common stock. The move was a clear block and tackle move to make it much more difficult for an outside entity to buy up shares in a hostile takeover bid.

“The Rights Plan is intended to protect Netflix and its stockholders from efforts to obtain control of Netflix that the board of directors determines are not in the best interests of Netflix and its stockholders,” the company said in a statement.