Activist investor Carl Icahn puts Mentor Graphics into play with $1.86 billion bid

Billionaire activist investor Carl Icahn, which holds a 14.7-per cent stake in Mentor Graphics Corp, yesterday made an unsolicited $1.86 billion bid for the electronic hardware and software design solutions company.

Icahn has offered to buy the remaining of Mentor at $17 a share in cash, a premium of 17 per cent to the company's closing price of $14.52 on 18 February.

Icahn's offer is contingent on Mentor removing the anti-takeover provision, or the so-called poison pill, adopted by the company in June last year to prevent the billionaire from buying more than 15-per cent of the company.

Ichan initially bought a 7-per cent stake in the company in June and later acquired another 7.47 per cent last month, which gave him three board seats on the company.

Ichan, whose main aim is to get competing bids for the company said in a letter written on 22 February to Mentor's board, ''We believe there are potential strategic bidders for Mentor Graphics whose bid will reflect inherent synergies and should be superior to our $17 offer."

Early this month, Ichan said in an interview on CNBC that Mentor should be put up for sale, and he is hoping that putting Mentor into play would attract rivals like Synopsis, Parametric Technology Corp and Cadence Design Systems into making a competing bid.