Carl Icahn, who disclosed a $1 billion stake in Apple Inc. (AAPL) in August, said he had dinner with Chief Executive Officer Tim Cook and “pushed hard” for a $150-billion share buyback.
Talks will continue in about three weeks, said Icahn, the billionaire activist investor who has made a career of urging companies to make changes to boost the value of shareholdings.
While Cook announced a plan this year for a total of $100 billion in dividends and buybacks, Icahn wants Apple to allocate $150 billion more for share repurchases. Apple said in July that it bought back $16 billion of stock in the latest quarter.
“We argued very hard for it, we think it’s a no brainer,” Icahn said in an interview. The dinner with Cook took place yesterday at Icahn’s apartment in New York, the investor said. While they had spoken via telephone before, it was their first meeting in person.
Shares in Cupertino, California-based Apple rose 1.7 percent to $484.99 at 11:04 a.m. New York. The stock is down 10 percent so far this year through yesterday, compared with an 18 percent climb in the Standard & Poor’s 500 Index.
The iPhone maker had $146.6 billion in cash and investments at the end of June. Steve Dowling, a spokesman for Apple, didn’t immediately return messages seeking comment.
While Apple co-founder Steve Jobs resisted calls to return cash to shareholders, Cook has shown a willingness to meet investor demands. In February, hedge-fund manager David Einhorn called for Apple to give more cash back and later sued to get the company to increase shareholder returns. Apple in April increased its payout and boosted its stock repurchase plan.
Icahn, who has said that he considers Cook a good CEO, projects Apple’s stock can rise to more than $625 if it buys back shares, a person with knowledge of his thinking said in August. Icahn also wants Apple to borrow $150 billion at a 3 percent interest rate to fund the purchases and avoid paying more taxes, said the person, who asked not to be identified because the plans are private.
“Had a cordial dinner with Tim last night,” Icahn said in a Twitter posting. “We pushed hard for a $150 billion buyback. We decided to continue dialogue in about three weeks.”
Apple sold a record 9 million iPhones in the weekend debut of two new iPhone models last month, almost double the previous record even amid supply constraints for the iPhone 5s, the higher-end version of the two new versions, Apple said. The results also led Apple to say that quarterly revenue and gross margin will be at the top end of a prior forecast.
To contact the reporters on this story: Ian King in San Francisco at ianking@bloomberg.net; Beth Jinks in New York at bjinks1@bloomberg.net
To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net
Apple CEO Tim Cook
David Paul Morris/Bloomberg
While Apple Inc. co-founder Steve Jobs resisted calls to return cash to shareholders, Chief Executive Officer Tim Cook has shown a willingness to meet investor demands.
While Apple Inc. co-founder Steve Jobs resisted calls to return cash to shareholders, Chief Executive Officer Tim Cook has shown a willingness to meet investor demands. Photographer: David Paul Morris/Bloomberg
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