Carl Icahn considered hostile takeover for control of Netflix
The billionaire and former corporate raider, who recently acquired a 10 percent stake in the company, tells CNBC that he finds Netflix's "poison pill" defense plan "really reprehensible."
Activist investor Carl Icahn said today he has considered launching a hostile takeover bid for Netflix, in which he recently acquired a 10 percent stake.
When queried on the approach to gain control of the Internet streaming and DVD rental service, Icahn told CNBC: "The thought had certainly entered my mind. I have to admit I think about it, but we haven't made that decision."
While saying a hostile takeover was "certainly an alternative," the billionaire and former corporate raider called Netflix's recent adoption of a "poison pill" plan to defend against just such a situation "really reprehensible." Netflix board of directors approved the plan on November 2, a few days after Icahn revealed in a Securities and Exchange Commission filing that acquired a nearly 10 percent stake in the company.
Calling Netflix "a great platform," Icahn said he couldn't understand why the company hadn't been snapped up already, noting obstacles for potential competitors.
"To begin with, I'm not sure you can build the business that easily. It's not like you build a widget factory and you start making widgets," he said. "I just don't think you can buy that. You walk in facing...27 million subscribers."
Speculation that the company is currently an attractive takeover target has heated up recently on rumors that Microsoft might also be sniffing around Netflix. Unconfirmed rumors late last month suggested that the Redmond, Wash., software giant might be prepared to offer $90 a share in an acquisition bid.
Shares shot up 13 percent on the Microsoft rumors, and another 15 percent on Icahn's disclosure, delivering a recent high share price of just more than $80, although the stock has traded as high as $133 in the past 12 months. Shares of Netflix closed today at $75.97, down $1.71, or 2.2 percent.
As for what Icahn thinks the company is worth, he wasn't willing to say.
"I have what I said in my 13-D. I don't have anything definite," he said, referring to his SEC filing. "Obviously, I think the company is worth a lot more than what it sells for."
Netflix representatives declined to comment on Icahn's statements.