Federal regulators have given billionaire financier Carl Icahn a green light to buy a big stake in Eastman Kodak Co, which provoked a potential investor revolt this fall by betting its future on digital photography.
The veteran corporate raider got permission from the Federal Trade Commission late last week to buy as much as US$500 million of Kodak stock, which would make him the photography company's biggest individual shareholder with a 7.3 percent stake.
While Icahn's motivations remain murky, "he is in there to make money, one way or another," said analyst Ulysses Yannas of Buckman Buckman & Reid in New York.
"Obviously people think there's value there or they wouldn't be doing this," echoed Shannon Cross of Cross Research in Short Hills, New Jersey. "With 7 percent, he's going to be applying pressure to Kodak. Whether it amounts to a change in strategy, that's to be seen."
Calls to Icahn's New York City offices were not immediately returned Tuesday.
Icahn became known as a corporate raider in the 1980s when he profited handsomely through investments in Texaco Inc, USX Corp and Phillips Petroleum Co.
In 2001, he made a last-minute bid to reacquire Trans World Airlines -- which he took over in 1985 and ran until 1993 -- before losing out to American Airlines' parent company AMR Corp.
In September, Kodak slashed its US$1.80 annual dividend to US$0.50 to help fund a major shift away from its ailing conventional film business and into the dynamic but highly competitive digital arena. Infuriated investors drove the stock down to an 18-year low.
Shares of Kodak rose US$0.10 to close at US$24.31 Tuesday on the New York Stock Exchange. They have fallen 50 percent since a 52-week high of US$41.08 in January.
Two weeks ago, a potent group of investors angered by Kodak's hard shift staged a meeting at Providence Capital Inc's offices in New York to examine ways to prod the company to reverse course.
It's unclear whether Icahn is allied with that group, made up of scores of institutional shareholders that control an estimated 25 percent of Kodak's stock.
The trade commission, on the lookout for deals that run the risk of inhibiting competition, reviews all transactions worth more than US$50 million that involve the sale of assets or voting stock.
In an e-mail to its 62,000 employees Tuesday, Kodak said it remained convinced it has the right strategy in bolstering its digital businesses.
"The best way to inspire confidence in our strategy and generate growth is to superbly execute on our business performance," it said.
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