Market Ambivalence

The market, the saying goes, is always right.

And if the market is right, Carl Icahn will not be the next owner of Mentor.

Mentor’s board isn’t leaving anything to chance, announcing via an SEC filing today that it would strongly urge shareholders to support its current directors, and reject dissident shareholder Carl Icahn’s alternate slate.

“The Icahn Entities are attempting to replace your directors, who have supported Mentor’s successful strategy, with nominees who have, in our opinion, preconceived notions of what is right for you and who do not have the collective knowledge, skill and experience of your current board of directors.”

But the voice that counts most is that of the shareholders themselves, and market, for now, is not pushing the stock up. Icahn’s tender offer of $17 per share remains on the table, yet Mentor is trading at just under $15 a share. That suggests the market doesn’t believe Icahn’s proposal will be accepted, or that another bidder will come forward.

That’s probably a good read of the tea leaves: Icahn and his ally, Casablanca Capital, together control just over 20% of the outstanding shares. But no other major holder of Mentor stock has publicly called for changes at the EDA company, and for now it looks Wally Rhines and the rest of the management team will hang on. 

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About Mike

Mike Buetow is editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He is also vice president and editorial director of UP Media Group, for which he oversees all editorial and production aspects. He has more than 20 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow