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DETROIT - Carl Icahn, the corporate raider who took a 5.2 percent stake in Federal-Mogul Corp. last week, plans to talk to the supplier's management about "ways of increasing shareholder value."
Federal-Mogul shares rose 26 percent last Wednesday, March 29, after the disclosure about Icahn's move. The financier is widely known for walking away richer after finding an undervalued company.
Federal-Mogul, a supplier of engine seals and bearings, has a "poison pill" takeover defense plan to fend off such raiders. But analysts say Icahn has the power to pressure the company to take actions designed to restore shareholder value even if he does not mount a hostile takeover.
Steve Feeny, a spokesman for the Southfield, Mich., company, said FederalMogul has had no discussions with Icahn and learned of his position only after Icahn's filing with the Securities and Exchange Commission. Automotive News ranks Federal-Mogul as the 27th-largest supplier of original-equipment parts to North America.
Icahn's move on the auto parts industry should come as no surprise, analysts said. The sector, as measured by its price-to-earnings ratio, is among the poorest performing categories on Wall Street. A low...