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Icahn to invest $2bn in Moto

The billionaire investor, Carl Icahn, will buy $2bn (£1.02bn) of Motorola stock, the world’s second largest mobile manufacturer said Thursday.

Icahn has been associated with Motorola since his comments in January about the company’s stock being undervalued. He also suggested Motorola reward investors with bigger paybacks, seen by some as a slight to Ed Zander, the company’s chief executive officer. Zander has battled to increase the company’s profit margins on its often criticised portfolio.

Icahn and his fund, Icahn Partners LP, are each filing to buy at least $119.7m and up to $500m in shares, Motorola said in a statement. Icahn Partners Master Fund LP and Icahn Partners Master Fund II LP are each filing to buy more than $500m in shares of the company, the statement said.

Icahn is Motorola’s 11th-biggest shareholder.

Motorola made no comment beyond a statement of facts on the stock acquisition.

According to the financial news agency, Bloomberg, eight of the company’s 10 largest investors added more shares in the last quarter, which, it says, signals “their confidence the company can boost results”. Motorola’s shares dropped 9 per cent in 2006 and are down 10 per cent so far in 2007

Also on Thursday, Motorola said it would reduce its board from 13 to 11 members. According to the firm, two directors decided not to stand for reelection at the company’s annual meeting on May 7.

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