King Ichan: The Biography of a Renegade Capitalist

by Mark Stevens

"I'm like the gunfighter you hire to save the town. That gunfighter is there to do good...but he'll only do what he does if he knows he'll get paid for it." - Carl Icahn

In this dramatic, deal-by-deal portrait of legendary and, until now, secretive financier Carl Icahn, bestselling business writer Mark Stevens takes us behind the scenes of some of the biggest deals in U.S. corporate history: Icahn's multibillion dollar raid on Phillips Petrolium; his bold move on Texaco's hidebound management, which netted him $500 million in the largest single transaction ever recorded by the New York Stock Exchange; Icahn's prolonged battle with CEO David Roderick to break apart the once mighty steel giant USX; and his stunning takeover of TWA.

To write this fascinating audio book, Mark Stevens has utilized to the ultimate his incisive investigative skills and his extraordinary access to Icahn himself as well as Icahn's friends, associates, adversaries, and critics-those who rode on his takeover bandwagon, and those who fell beneath its wheeling and dealing. The story he has to tell is that of a bookish boy from Bayswater who went to Princeton, studied philosophy, dropped out of medical school, landed as a minor player on Wall Street, and then had a billion-dollar epiphany-a means of "controlling the destiny of corporations" that would ultimately earn him his fortune.

Along with the inside details of the deals that defined the high-flying eighties, Stevens provides a vivid, totally unauthorized profile of Icahn himself. At times deceptively disorganized and absentminded but a ruthlessly brilliant tactician when the chips are down, Icahn won his place at the pinnacle of capitalism by realizing that America's CEOs could be "persuaded" to spend millions in corporate funds or search for white knights to avert a takeover that might cost them their jobs. It was a plan of predatory genius; in the seventies and eighties Icahn garnered huge profits time after time-until he devoured TWA, and found that his ambitions were greater than his management talents. With his very fortune hanging in the balance, Icahn engaged in epic negotiations with the Pension Benefit Guarantee Board, engineering what may be the premiere victory of his career.

A fascinating tale with a cast of characters that includes Michael Milken, Ivan Boesky, T. Boone Pickens, Dennis Levine, and most of the other key players of the takeover era. King Icahn is the first biography of the business buccaneer who changed the course of corporate America.

Genres: Biography, Business, Finance, Nonfiction, Economics, Audiobook, Autobiography

Audiobook

First published June 1, 1993

About the author

Mark Stevens is a quintuple threat:
•Lifelong entrepreneur
•CEO
•Bestselling author
•Animal lover
•Die hard romantic
Mark has published more than 25 books including most recently:
•His debut novel Evidence Of Love
•A first children’s book Sky’s Amazing Dream (focused on his beloved Golden Retriever)
•An inspirational leadership book, Hike A Thousand Miles
•In the style of his classic best seller, Your Marketing Sucks, the soon to be classic sales guide, Everything You Learned About Selling Is A Lie.

Reviews

[N · Rating 3 out of 5]

Philosophy at Princeton - empiricist (like Soros). Was an options salesperson and helped to create transparency in pricing by publishing a weekly report of mids. He had a rich uncle who helped him get a seat on the NYSE and founded his own options brokerage. They tended to do arbitrage plays (Kinsley was the analyst). Basically Icahn made easy money in greenmail but a lot of hard earned money in takeover attempts and proxy battles that he needed to see to completion to make his future threats credible. His negotiating strategy is to overwhelm and disorientate with multiple offers and scenarios having thought through most of the permutations beforehand. He's fairly indefatigable and relentless even to squeeze a few extra pennies in a transaction (possibly just his nature or to enhance his credibility).

First raid came from customer order for options on a REIT (Baird & Warner), which traded at 8.50 but had a book value of $14 and liquidation value of $22. He launched a proxy war and won and then liquidated the assets.

Second raid: Tappan. Buys the company and agitated to have it acquired - ultimately by Electrolux. Dick Tappan was so impressed that he decided to invest in Icahn's fund.

Third raid: Saxon - buys shares in a cheap paper company and tries to get control. But after talking to employees/others in industry he gets cold feet and settles for a green mail payment after threatening to buy more shares and wage a proxy war.

Fourth raid: Hammermill - another paper company he tried to sell, but basically ended up in a stalemate with management because he wasn't able to raise enough money to finish the raid. But he got his expenses reimbursed mostly and walked away with a 24% return.

Easy green mail: Owens-Illinois, American Can, Anchor Hocking

Marshall Field: management blocks a takeover attempt from another retailer - this blows up Icahn's merge arbitrage trade. Icahn buys shares to get control to try to force another sale. Management tries all legal means to stop Icahn but fail and so relent to a bid from Batus. At first Batus low balls at 25.50 even though the previous takeover offer was 42. Eventually Icahn sells at 30.

Dan River: buys a textile firm at 12.80 (book value = 38) and tenders for the whole company. Management leads a buyout instead at 26.50

"In the beginning, I was playing poker...I didn't have the money to fight for the long haul - to pay the interest on the shares I held. If push came to shove, I would have had to find a way to protect my credibility but it never came to that because those companies didn't have the guts to really fight me." pg133-134

ACF - rail cars. automotive, energy equipment loses money after a cyclical downturn. Icahn buys at 32-41 when he estimates a liquidation of $60. Management also wants to do a LBO so stalls for time to line up financing while asking Icahn for a standstill while it searches for a buyer while giving Icahn a right to bid above. Eventually he buys ACF and sells off a division to help pay for the transaction.

Cheesebrough Pond - Icahn gets management to hand over a US Open box and to buy a division of ACF on top of greenmail (at market price).

Phillips - T Boone Pickens launches a raid but management pays him greenmail @53 and stock then falls to 40s (management has an offer @ 43). Icahn offers 55 and says he'll step aside if management's bid tops his. Icahn gets Drexel to write a letter saying that it was 'highly confident' that financing could be arranged for a LBO (Morgan Stanley, Phillips' banker, thought this was surely impossible). Phillips puts a poison pill in place though they lose in a proxy battle so are forced to up their bid and eventually reimburse Icahn's expenses ($30mio). Earns $50mio for 3mo of raiding.

TWA - Icahn goes up against Frank Lorenzo, but uses the prospect of a union buster like Lorenzo to get major labor concessions. Icahn sees TWA as a cashflow machine, but obviously depreciation is very real and TWA eventually becomes a failed airline. However, Icahn was able to get his equity out after issuing some more debt. He resists investing much in the airline given the chronic overcapacity. He sells the Transatlantic routes to American but ends up in a battle over the underfunded pension that becomes a major liability due to his 80%+ ownership. He tries to get below this threshold but Congress (St.Louis) puts together a bill to target Icahn so that he could be on the hook for $1bio. However PBGC overplayed its hand and both labor and creditors ended up siding with Icahn rather than face bankruptcy and protracted legal action limiting Icahn's downside to a much smaller figure (100mio).

Texaco - Icahn bought after the company got into trouble for acquiring Getty and in the process the other suitor Penzoil, which sued for $10.5 bio for 'tortious interference' Management wanted to hold out for a Supreme Court ruling rather than pay such a ridiculous sum. Icahn knows that Texaco shares are pricing in a large uncertainty for this legal liability. He buys shares off of a distressed raider for $29 and basically forces management to pay Penzoil a $3bio settlement. Post settlement, he then turns down Oxy (Hammer) who bids $55 for his shares. Icahn launches a proxy war but loses and after a stalemate with management, who pays out an $8 dividend after selling some divisions that Icahn would likely have sold anyway, Icahn sells his shares for $49. Total pnl: $500mio.

US Steel - agitates for a split of the companies into steel and energy. Eventually he succeeds, but has a lot less leverage without Drexel to sponsor a junk bond financed takeover threat. Total pnl: 183mio.



Al Kingsley also mentioned AT&T and GM as undervalued targets. Icahn knows the limits of his practices: "they'll hang us." (pg 170)

"Icahn sees dozens of possibilities on a single screen. The mental agility that enables him to zigzag from C to F and back to R, leaves him opponents so thoroughly confused and frustrated they are on the verge of shorting out...people think they know what Carl's goal is when in fact he has no fixed goal."

"Icahn creates a complex environment in which he can camouflage his strategy. What does Carl really want? Which direction is he headed in? By tossing out dozens of variables, he leaves everyone guessin." -pg 61

"Icahn prefers to confront transactions with a worst-case mentality. Before making a move, he surveys the chess board, asking himself, 'what is the worst thing my adversaries can do to me, and how can I protect myself on all flanks?' Always checking goals, weak points, and his leverage.'" - pg65

"Icahn will make dozen of simultaneous offers, some reasonable, others absurd." pg299

Things I didn't know....

"Delaware law required that a buyer with 15%+ stake had to rapidly boost his stake to 85% or else be barred from merging the company of selling its assets for three years." pg 263

"By owning 80% of TWA, Icahn was deemed part of a 'control group,' which made his other businesses jointly liable for the pension funding. 80% also being the threshold that allows him to have losses passthrough to his other corporations."

[Alex Gravina · Rating 4 out of 5]

A surprisingly fun story of a controversial financier. Although you'd have to really enjoy finance to enjoy it, because the book is almost exclusively deal details.

[Zak · Rating 3 out of 5]

[3.5*]

[Luke Durbin · Rating 3 out of 5]

This was a most interesting listen, hearing the story of the beginnings of a fortune being built not through successful investing in the traditional sense, but through using the system of "corporate democracy" to take large positions in undervalued companies, hold their board's of director's hostage until they either gave him a seat on the board, bought him out or sought a white knight to buy him out.

There aren't too many lessons to takeaway. Though, throughout the entire book you are in awe of just what Icahn could achieve in a few mere months after taking a position and for that reason at times he comes across more of an anti-hero than anything. But that said, everything he did was within the rules of the game and was hard to disagree with his view that when management's interests aren't aligned to shareholders, they will defend their executive positions and pay packages before defending the ultimate rights of shareholders.

My main gripe with the book is that because I got the audio, which was published in 2010, I didn't realise that the original book was published in 1993, meaning that there is a good 25 years of Icahn's career yet to be filled in. This is obviously not the author's fault, but nevertheless it rendered the book lacking in my view and 25 years on the book is a less valuable read now than when it was published.

[Tony · Rating 3 out of 5]

This is described as "a new and expanded" edition, but it disappointingly still ends abruptly in the middle of the then-unfinished early-90s TWA battle. Rather than even finishing that story (the final line of the book is a twenty-year-old note that "At the time the book went to press, the terms of the settlement were announced but yet to be signed by all parties."), never mind adding anything of what happened over the next two decades, the "new and expanded" part seems merely to be a preface about how Icahn had originally tried to block the publication of the book.

At times it also reads surprisingly like a first draft of a self-published work, rather than a 20th Anniversary edition. The early chapters, setting out Icahn's early deals, flow well, but once we reach the more complex later deals, Stevens gets bogged down in much too much detail, and the book becomes somewhat of a slog at times. (It also seems like the copy-editor gave up at that point too: the second half of the book is riddled with typos, homophone errors, random capitalisation, run-on sentences, and even occasional places where entire lines seem to have vanished mid sentence.)

Not sure I could ever actually recommend it to anyone, but I still mostly enjoyed it despite the many flaws.

[Abdul · Rating 3 out of 5]

Lessons Learned:
In order to be a hardcore capitalist you need to possess a sound/brilliant mind and you need to be ruthless.

Summary:
Interesting book about one of US’s foremost capitalists. The book chronicles the rise of Carl Icahn through exploring some of the different deals he was involved in, mergers and acquisitions and the many raids on corporations during the money getting eighties. Fascinating yet interesting at the same time. Overall a good book that paints a vivid portrait of the man while also detailing some of the inner workings of Wall Street.

[Tirath · Rating 1 out of 5]

Such a rubbish book. Badly written, dated, and even then, very empty on the editing front.
Each episode, TWA, Philips Petroleum, USX - - - nothing tied up together in the end.
All very disjointed.

So I end the book, not knowing much about Icahn, nor knowing much about what really happened with these investments except for the fact that he made a lot of money by using greenmail.

Note: TWA - - - stay away from airlines :)

[BuenoBomb aka Andre Bueno · Rating 5 out of 5]

Carl Icahn's biography is very well written and interesting to say the least. The author portrayed Icahn as a master negotiator, financial engineer, and an all around street smart money manager. I definitely look forward to rereading this book in a few months!

[Tab Williams · Rating 2 out of 5]

I decided to read after watching the excellent HBO documentary on Icahn. Unfortunately, I wish I stopped there. The documentary is engaging, informative, and highly enjoyable.

King Icahn is none of those things. My main takeaway is that Icahn is even more of an a** than I initially believed. Part of this story suffers insofar at it ends in the middle of his investing career. You get nothing about the dynamics with his son Brett, nothing about his tiff with Ackman, and nothing about him encouraging Apple to change its capital allocation priorities. That is a shame. Other than his early years, much of his personal life is left undiscussed. The other reason the story suffers is Stevens talks about each activism campaign in excruciating detail. The first such highlight was fascinating. The 5th using the same playbook? Not so much. Stevens even managed to make the TWA saga boring. The best and most interesting nuggets about Icahn are buried throughout, but they are hard to get to and frankly not worth the effort. You get 80% from the HBO documentary with even more interesting nuggets.

Overall, this was a disappointing. I would only recommend to an Icahn super fan (and why you would be I have no clue) or a CEO who is currently being attacked by Icahn or a similar activist.

[Jasper Knight · Rating 3 out of 5]

Most of the time, I enjoy reading books about titans of industry and how they built their fortunes. I have no problem with people owning large amounts of wealth and usually view their stories as inspirational, but Icahn’s story puts a bad taste in my mouth because it’s hard to say if he ever produced anything of value. To sum it up, his modus operandi was to simply buy a large position in an under valued company and be the biggest jerk possible until he was either paid off or got his way. One can argue that him and other corporate raiders woke up sluggish establishments and reminded them that they are to act in the interest of shareholders and not themselves. But the whole intent behind Icahn’s raids just comes across as incredibly selfish. This book definitely displays the more brutal side of capitalism and how those with enormous wealth and leverage can affect thousands of lives. Likable or not, you do have to admire Icahn’s sheer ability to plan takeovers and identify undervalued assets. One also has to appreciate his distaste for glamour, and even with extreme wealth, he lives a very simple life. Probably would not recommend, but it was an intriguing read.

[Ivan Kuznetsov · Rating 1 out of 5]

"King Icahn"? That's the title? Seriously?

The book preserves a self-congratulatory and seemingly one-sided depiction of main events and depict "bigger than life" genius of KING ICAHN. The style is awful, impersonal and dull. It's all about how great, smart, benevolent, etc. etc. ICAHN is.

The greenmail tactics that made Icahn rich would appear questionable if not legally problematic in the current legal context.

Mark Stevens, the author of this 20th edition "new and expanded biography" (according to goodreads.com) seems to have written over 30 books, alongside "Evidence Of Love" and "10-minute enterpreneur". In all honesty, without disrespect, and the guy must be really intelligent, Icahn could have chosen a better author / angle to write his "biography for hire".

[Sy. C · Rating 4 out of 5]

Listened to the audiobook narrated by the author. Delivery was energetic, emotive and clear. Rich in details on the corporate activism Icahn is known for, essentially raiding companies' coffers for his own benefit (and to a lesser extent, other minority shareholders / arbitrage funds). When greenmail fell out of favor, he switched to arbitraging the difference between market and full "control" values by agitating for asset sales. His poor outcome on TWA outlines his far superior skill as a short-term arbitrageur than long-term business operator. The author provides useful context on the external conditions that made Icahn's success possible during the junk bond-driven LBO era of the 80's. All in all, an engaging, entertaining read.

[Ayush Godbole · Rating 3 out of 5]

DNF at 64%
Man, I was disappointed.
This is such a boring read! There's an attempt to make it sound more like a story and less like a newspaper article, but it doesn't really succeed. The only thing that kept me going was my interest in Carl Icahn and Finance. The same five sentences were used to describe him every other page, and I just lost interest about halfway through the book.
Also, this book doesn't read like a biography; it barely describes the man other than the aforementioned five sentences. This reads like a Wikipedia article; the writing is as bland as it gets.
Really, really disappointed.

[Jerry Boyarsky · Rating 5 out of 5]

Truly fascinating biography of a brilliant financial giant! Beginning with his family life in Far Rockaway, NY and avoiding completion of medical school by joining army reserves and his life story gets better by the page. Mr Icahn, recognized many opportunities and took controlling interest in US Steel, TWA and some of the other most well known corporations in this country.
It was a very good read and I am hoping the second volume will pick up where this one ends.
I thank Patty A. for lending me her copy!

[David Skinner · Rating 4 out of 5]

I learned a lot about M&A, spinoffs, restructuring, and other financial instruments used to create wealth in the 80’s that led to the crash in the early 90’s. Icahn is a fantastically brilliant mind and ballsy businessman, and I was helped to consider that capitalism is good but there should also be a sense of social responsibility, especially as a Christian.

I would recommend this book to someone in finance or who enjoys finance.

[Nam KK · Rating 5 out of 5]

I would give the book 5 stars for the first part of the book - it is how a finance book should be written. The second part is more difficult to have a grasp on as deals were getting more complicated. I took 1.5 credit class on M&A quite a while ago, and still it is not easy to follow.

I was thinking about giving the book four or five stars - I would be more comfortable if I could give it 4.5 star.

[Priit Rohumaa · Rating 4 out of 5]

Quite an extraordinary capitalist. Known as a fierce fighter against corporations lazy managements who protect more their rights than shareholders. Taking enormous risks he has accumulated around 15$ billion net worth. Fun reading how he fights his proxy fights and presses corporate boards.

[Mark Kasson · Rating 5 out of 5]

Love me some good M&A, distressed stories and this has that. Sheds some light on him as the investor and as the person, digging into his thinking and patterns. They can't all be winners and for Carl this is true as well. It doesn't cover all of his activities but it gives a feel for some of the big public ones.

[Adi · Rating 5 out of 5]

The story of how a middle class kid from Queens became one of the best investors on Wall St. From dropping out of medical school to loosing it all in in the crash of 1962,he had to go through the tough times to finally emerge as a feared force on the Street

Inspiring indeed!!

[Paul Copcutt · Rating 4 out of 5]

Good insight into the 80's corporate raiding of Gordon Gekko of the Wall Street movie. Some chapters seemed to drag out the telling of a particular deal but in a all gave you an understanding on Ichan and and his personality and style.

[Yishen Kuik · Rating 5 out of 5]

Very detailed history of Carl Ichan pre 2000s and gives you a good sense of the man.

[Jason Orthman · Rating 5 out of 5]

An excellent insight into the dealings and philosophy of Carl Icahn through the detailed description of a number of his deals in the 1980s. Compelling read. (Kindle).

[Michael Piccatto Jr · Rating 5 out of 5]

Timeless read. Very well written.

[Ethan Lambert · Rating 4 out of 5]

It is good book about Carl ICAHN. Unlike other titans aka masters of the universe who made Their money in 80's there isn't a lot of books about him. Very impressive character indeed.

[Shreyas · Rating 3 out of 5]

Okish book, factual, but prose could have been better

[Mohit · Rating 4 out of 5]

Quite dated, but interesting. Playbook very hard to replicate today, but I'm sure there's a little Icahn somewhere bullying some <£50M EBITDA co into paying a thick dividend

[Alex Xu · Rating 5 out of 5]

这老头运气也是相当好了//靠脸皮厚赚钱

[Becca Wright · Rating 4 out of 5]

An impressive read.

[Tom Wilson · Rating 3 out of 5]

- Read like a wikipedia post at times
- Wish there was more background on the people he was working with

[MLD · Rating 4 out of 5]

Tale of a straight-shooter. Mediocre writing.